Comments on: Tweeter demonstrates how not to handle liquidation

The regional electronics retailer abruptly shuts down, leaving employees, customers hanging.

[MickBurke]

Another perfect example of a large corporation gobbling up local retailers, in my case Brwyn Mawr Stereo, a small local HiFi shop, and then overextending themselves till they collapse and destroy everyone they gobbled up. Just another sign that our economic system can't sustain itself.

Power to the small business man.

[DrollTroll]

hold on there big fella...the big business man like Tweeter is nothing more than a small business man who feels his oats and expands. If you really intend "Power to the small business man," you're in fact asking for that little guy to do well, build up his business (by any means) and become a Tweeter-type business. Be careful what you wish for.

[MickBurke]

Not in the least DrollTroll. You can do it like Bill Crutchfield who owns and takes responsibility for the company his name is on:

"For many years, I have been concerned about the growing credit bubble. It was obvious to me that it was unsustainable and that an inevitable day of reckoning would come. To protect our customers, our employees, and my family from the disastrous consequences of a financial meltdown, I positioned Crutchfield to withstand the worst. We became very frugal with how we spent money. We did not pay outlandish executive salaries and bonuses. We did not build fancy facilities. We did not expand our retail store operations. And we did not buy other companies. Instead, we worked extremely hard to improve how we serve our customers, while we managed every aspect of our business with excellence. Furthermore, we paid off all of our debt and accumulated cash reserves."

From http://www.crutchfield.com/mediarelations/20081026-BillLetter.html

[chuchucuhi]

Jeez, that's terrible just terrible but considering this amount of economic turmoil it could still be much worse.

[etiahwhite]

Wow...I didn't even know that tweeter was going down. I work in retail and in the past month 2 stores in mall have gone out of business. In the case of one store which I worked directly across from I was working on monday and there manager was interviewing and hiring people and then on tuesday they had a conference call to tell them that the next day they'd be closing down. A few people had just started the week before. I really felt for them to come into work one day and then find out that they were closing next day. When I'm getting in one of those I hate my job moods I think of that and then say to myself thank goodness I have a job.

[etiahwhite]

Wow...I didn't even know that tweeter was going down. I work in retail and in the past month 2 stores in mall have gone out of business. In the case of one store which I worked directly across from I was working on monday and there manager was interviewing and hiring people and then on tuesday they had a conference call to tell them that the next day they'd be closing down. A few people had just started the week before. I really felt for them to come into work one day and then find out that they were closing next day. When I'm getting in one of those I hate my job moods I think of that and then say to myself thank goodness I have a job.

[John-in-PA]

Practicing and Preaching

If you were planning on stopping by a local Tweeter store this weekend to find one last bargain before the chain closed it doors on Sunday, don?t bother. Despite public announcements and rather gaudy in-store posters counting down the days to the December 7th closing, Tweeter?s owner decided to abruptly shut down everything this morning (Tuesday, December 2nd).

Store managers and employees who arrived to open the 60-some remaining stores (12 or so in PA, NJ and Delaware) were informed of the surprising announcement by phone or email. They were told they had 15 minutes to gather personal belongs and vacate the premises. Some, I?m told, did so under the supervision of local police.

Others, like me, received phone calls and simply told not to come to work. We were fired.

Reportedly ? but I can?t confirm it ? Schultze Asset Management, the owners of Tweeter, filed Chapter 7 Bankruptcy this morning. (The company filed for Chapter 11 in early November at the beginning of its liquidation effort.) The potential repercussions, I?m told, are no final paychecks for employees, no severance, vacation pay or promised bonus for those who agreed to stay until the stores closed.

There is an irony in this situation, and I use that word euphemistically.

Tweeter and its local predecessor, Bryn Mawr Stereo, built its once-strong reputation on exceptional customer service, encouraging and training its sales people to build strong and trusting relationships with customers ? and to go the extra mile. Those of us who did ? and there are many I work(ed) with who are far better at it than me ? learned the benefit of working that way. It paid off, both monetarily (in what we earned), and it ?paid? bonuses professionally/personally in the long-term relationships and even friendships developed with customers. For some of my longer-tenured colleagues, those relationships have lasted a decade or more.

The ?irony? is that as we asked for and earned the trust and confidence of our customers, we also gave it willingly to our employer. When we were told that changes in policy, structure or operations were for the long-term benefit of the company, we accepted the explanations. Sure, we questioned many of the actions, but the response was convincing ? if now obviously insincere.

The perfect vision of hindsight now easily outlines the steps to lead to Tweeter?s demise ? internal/management missteps, external influences of technology/product changes, diminishing profit margins and overall profitability, and those myriad things we lump together and call ?the economy?. But the analysis of the rise and fall of Tweeter is a conversation for another day.

The question of the day, to me at least, is that of trust. What do we expect ? what should we expect of our employers and management? At what point in the past weeks did they cross the line and betray our trust? Why did they mislead us, lie to us?

Or, do they owe us an answer to those questions that at all?

I can?t argue with the fundamental goal of a company to turn a profit. The bigger the better, right? Nor would I expect any company to do anything that would negatively affect its bottom line.

If a store doesn?t turn a profit ? or meet even revenue expectations, of course, it is no longer of value to its owners and/or stockholders.

And, if a company is draining its resources and failing to provide a return on investment, then no one can reasonably deny the right of those who have staked it to cut their losses.

Let?s be honest. All of us were ultimately in this business for the money. We are (or were) sales people because it paid our bills ? sometimes more. If it wasn?t financially rewarding, we wouldn?t be doing this! It is ? or was ? fun. And I am ? or was ? good at it!

Sure, I am upset to be suddenly unemployed (if only unemployed a few days earlier than I expected to be). And, yes, I have been trying to find my next ?opportunity? with all vigilance ? an unsuccessful quest to date. And if there is no final paycheck (and all the other stuff like severance and bonus), it will have a dramatic, potentially, devastating impact on me and my family.

But what most upsets me today is that my character has been compromised. I was asked to support a management team, my bosses and my owners and they have betrayed me. In my relationship with my customers, they made me a liar.

Call me naïve. Toss in a touch of unrealistic Pollyana-ism. I?m guilty.

Shame on me.

I know my situation and that of my colleagues is not unique. ?It happens,? as one friend told me, ?it happens almost every day.?

But today it happened to me.

And it really hurts.

And, oh yeah, I need a job.


John
Bucks County, PA
[e-mail]

[rwrife]

The solution is simple, figure out which companies Schultze Asset Management is managing and refuse to help them liquidate those assets.....and spread the word, since one person can't really do much.

[fuzbears]

These abrupt closures have only one real source, incompetent management. It means that they were ignoring financial issues till they were literally out of money. The company had assets worth far more than the inventory in a single store. They had stores in the chain that were making profits; they had loyal customers; and they had knowledgeable employees. If they had not had to shut down so abruptly, these assets could be sold off, and reclaimed much of the value. But sometimes their egos get in the way, and other times, the corporate parent wants to suck them dry of blood before they let them die.

[billtkat]

Why in the world would ANYONE be surprised by this ? Look what sorry Joe and the good old boys did when they lied to the first group of tweeter employees a couple years ago. That should have been all the sign you would need to know about how this company was run. What a bunch of crooks and liars - I am sure you were all told the same crap of how to stay on and get some sort of bonus or do not worry about chapter 11 it will make the company stronger - Yeah I fell for it too a couple years ago and landed in the same place all of you have - empty promises

[dachrisco]

I was a faithful employee of the Florida-based chain, Sound Advice, long before it was purchased by Tweeter. I believed in Sound Advice, and the principals for which it stood. Prior to our purchase by Tweeter, we were considered "a notch above the rest". I believed. We delt in upper-mid to high end a/v, and our clientel recognized that we could not compete with the big box retailers--nor did they expect us to. I believed.Naturally, we couldn't compete with the big-box, but WE DIDN'T HAVE TOO!! I still believed. Our customers had come to expect a superior level of service that extended from the moment they shook hands with an associate to the moment they happily shook hands with the technician leaving their home. Yes, I continued to believe. Then we were bought by Tweeter, and everything changed. Suddenly, our consumer playground stores were shut down, and our high-end audio was gone (remember the days of B&O, B&W, just to name a couple). We were told that the company was going to inherit the Sound Advice model and that things would get even better. We would continue to grow as a company ("ONE company, ONE way" was the catch phrase ********-jargon of the hour) and all other acquisitions would follow this model. I believed. Three years ago I moved to Georgia, believing I was working for a value-based company--in general, doing the right thing by it's customers AND it's employees. God, was I WRONG. Those of us on the lower rungs of the totem pole have worked our proverbial ***** off to uphold a paper mache guise of integrity, while those that sit atop are collecting their bonuses and laughing all the way to the bank. Generally, it was the custom installers and sales associates that tried their best to adhere to the standards set forth by those promoted from the ranks--day in, day out, those who believed in the integrity that this company was once-upon-a-time based upon. Don't be mistaken, I am NOT speaking of the executives who have run this company (into the ground, BTW). No, I'm talkin' bout the men that worked their way up...that guy that worked in the warehouse, then on delivery, then as an apprentice, then as crew chief--his van was even on the cover of the advancement books-- then to field supervisor (yes, DW, I'm talkin bout you). Or the guy who hired me, gave me a chance, who had been a sales associate, then a GM, then a director of install for SA. Thank you, D.T., for having faith in me. Funny thing is, it was these guys and all the people like us doing the real work while the execs reap the benefits. You know, those guys that have all the strategies that school could teach them but have never spent a day in the field. To all of our clients who have believed in our company, our associates, and me, I am truly sorry. I know you lost money on down payments, gift cards, equipment brought in for service that you entrusted to us but will never be returned. I know you put a huge down payment on the system that your husband always wanted but never will receive. I've heard the stories, your stories, and I..we...are so sorry. Those of us trying to take care of you-to make things right- we did what we could, but it was not enough. Let me urge any consumer to take note of the names of those who recently "ran" the company, and exercise caution when purchasing from the bailouts to which they will move on. Of course, those in the upper echelon will certainly disagee with my statements but hey, what do I know, I'm ONLY an installer, right?

[mvl_groups_user]

I feel bad for Tweeter. It was a great chain, it's been in my area (Boston) for years. It's brand and reputation had been impeccable, a high end store well staffed with extremely well knowledged sales staff, and large enough to trust it would be around to guarantee its products.

Unfortunately, Magnolia ate their lunch. Best Buy had far inferior service, but the purchasing power from their mass market products meant Magnolia could always underprice Tweeter. In fact I know people who researched an HDTV with Tweeter's help, then saved a grand and bought from Best Buy.

Don't blame the shutdown fraud on Tweeter. Tweeter's management team was replaced with Shultze's in chapter 11, and I'm sure the original Tweeter owners feel terrible about how horribly their final customers and employees were treated.

A sorry end to a class act company.

[sellhifi]

Would love to comment on the electronics industry.
Oh, where do we start. I would start with an industry who took all
the good products (exclusives) and ****** them out to big box
movers, yes, i know there are sales to achieve but what value are left
in those brands names? Lets start with Denon, Boston Acoustic, Klipsch,
Polk, Kef, Velodyne , Niles, Monster (total ******), Alpine, Eclipise(nice product nowadays)
Onkyo. I love theater in a box, good stuff !!!!
As for mr.crutchfield, screw him. Great he has a mail order catalog. Much face to face service
to help customers everyday. Glad I could answer the difference between plasma and lcd so they
could order it from Bill. Screw the mail order people including crutchfield....Long live Walmart
for my high end stereo needs....

[gerry0081]

Ok so I have a 65inch mitsubishi dimond dlp. I have a 5 year waranty or had. So now that the bulb went out thats it???? What do I do???