The Front Door Was Sold at a Loss

A retailer built its fortune on carrying every album ever pressed. By 2005, revenue had fallen from $1 billion to $430 million.

You walked in for one album and came out with four.

The store was enormous. Rows of bins stretched toward the back wall, stuffed with spines filed under hand-lettered cardboard dividers.

Jazz had its own corner. Classical had its own aisle.

Whatever the staff had chosen that week played over the speakers.

There were listening stations with foam headphones and a rotating stack of staff picks. Handwritten cards taped to the endcaps explained why a particular album mattered.

You could spend an hour in there without noticing. The yellow-and-red sign was visible from half a block away, but what pulled you inside was the feeling that anything you wanted to hear was somewhere in those racks.

That was Tower Records.

Russ Solomon opened the first store in 1960 in Sacramento, California. He named it after the Tower Theater building that housed his father's drugstore, where he had started selling records as a teenager.

The store's real product was not music. It was selection.

A typical mall record shop carried 4,500 to 8,500 titles. A Tower store carried at least 50,000. The new release in the front window was priced to compete, sometimes sold near cost.

But the jazz reissue three rows deep, the classical boxed set, the import pressing no other store within a hundred miles stocked: those sold at full price.

A customer who walked in for a discounted hit walked out with two or three catalog titles at $17 or $18 apiece.

The hit was the door. The deep catalog was the register.

By 1999, Tower had grown to more than 200 stores in about 18 countries. Annual revenue reached roughly $1 billion.

The Sunset Boulevard location in Los Angeles had been listed in the 1974 Guinness Book of World Records as the largest record store on earth. It sat on the edge of the Strip, a few blocks from the label offices, and became a stop for musicians and buyers alike.

The stores ran on local knowledge. Each location's staff decided what to stock and how to display it, shaping the shelves for their own neighborhood. In 1990, Solomon appeared on the Forbes 400 list with an estimated net worth of $310 million, built almost entirely on the private company he still ran from Sacramento.

No chain had ever tried to carry everything. Tower made depth its entire identity.

Two forces arrived almost simultaneously.

Big-box retailers began selling hit compact discs as loss leaders. Walmart and Best Buy priced new releases at $13.99 or less.

Tower needed $18.99 to cover the cost of running a store devoted entirely to music. The traffic driver stopped driving traffic.

The catalog itself moved. Napster launched in 1999. Apple opened its iTunes store in 2003, selling individual songs for 99 cents.

The 50,000-title advantage that had defined Tower for four decades was suddenly available on a laptop.

The depth that no competitor could match in person required no shelves at all.

Tower filed for bankruptcy in February 2004, unable to make a $5.2 million payment on $110 million in bonds. Bondholders traded debt forgiveness for an 85 percent stake in the company.

Revenue fell to roughly $430 million by 2005.

The company filed again in August 2006. A liquidation firm won the auction for $134.3 million and closed all 89 remaining domestic stores by year's end. About 3,000 employees lost their jobs.

The chain that started in a drugstore ended in a courtroom.

Streaming services now carry catalogs of 100 million songs or more. The customer who once walked Tower's bins hunting an import pressing now scrolls a recommendation feed doing the same work.

The shelf that mattered was never the physical one. It was the promise that whatever you wanted was here.

The racks are empty. Every album is still in stock.