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Letter to the editor

Tweeter teeters in TV price war

The owners of Sound Advice file for Chapter 11 bankruptcy protection.

By MARK ALBRIGHT
Published June 12, 2007

Tweeter Home Entertainment Group Inc., the owners of high-end consumer electronics retailer Sound Advice, on Monday filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware.

The filing is the latest fallout from a flat-screen TV price war ignited by Wal-Mart Stores Inc. and Best Buy Inc. that grew out of a glut of new digital sets and sent prices tumbling last fall.

Slumping prices hammered sales and profits enough to trigger 3, 400 layoffs at Circuit City, store closings at CompUSA and a restructuring at Rex Stores, which last month pulled out of the Tampa Bay market. Tweeter Home Entertainment Group is halfway through closing 49 of its 153 stores by the end of this month and eliminating 650 of its 3, 200 jobs.

Shares of Tweeter of Canton, Mass., which sold for $7.12 a year ago, closed at 26 cents Monday, down 14 cents.

Tweeter is pulling out of Alabama, California, New York, Tennessee and most of Georgia. While Sound Advice stores locally remain intact, one in Miami is being closed.

"We are right-sizing our expense structure, " said Joe McGuire, president and chief executive. "We think people want more than a choice between just Best Buy and Wal-Mart."

The company said it will be business as usual at stores. Extended warranties should not be affected because they are guaranteed by a third party.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified June 11, 2007, 23:11:19]