Troubled music retailer Wherehouse Entertainment made its second Chapter 11 bankruptcy filing in just over a decade Tuesday as the slump in record sales across the country continues to claim victims in retail.
The Torrance, Calif.-based company said it will close 120 of its roughly 400 stores, and is planning to update and remodel its remaining outlets. Wherehouse earlier announced the closure of 30 stores.
A rep for the company said layoffs are expected -- at the staff level via the store closings and in the management suite to reflect the new smaller structure. However, the retailer has not yet determined how many of its 4,750 employees will get the axe.
Wherehouse -- like many of its competitors in music retail -- has fallen on hard times in recent months as music sales declined by nearly 10% over the past year and high expectations for the holiday season went largely unfulfilled.
In a statement, Wherehouse blamed much of the underperformance on the proliferation of free music on the Internet over the past several years, coupled with an exponential increase in the use of CD-burning technology.
The 30-year-old company also incurred a lot of overhead from the purchase of Blockbuster's 378-unit chain of music stores in 1998 for more than $115 million.
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