Over six months ago, Dealscape
spotted
the writing on the wall for upscale electronics retailer Tweeter Home
Entertainment Group Inc., which at the time was having a poor holiday season.
So it came as little surprise Monday when the 35-year-old Canton, Mass.-based
company finally filed for Chapter 11 bankruptcy protection as its debts
continued to mount. The news led
Boston
Globe columnist Steven Syre to ask what went wrong in the nine years since
the company's initial public offering. His conclusion: Wal-Mart Stores Inc.
indirectly caused Tweeter's downfall. Syre suggests that Wal-Mart's push into
electronics forced Best Buy Co. to vacate the low-end business and invade
Tweeter's niche. But Syre's argument ignores Tweeter's 1990s M&A orgy that
financially and geographically overextended the company not to mention
watered-down its business model. Some of the chains Tweeter purchased — like
Sound Advice — did not carry the same high-end products. Consequently, in
regions outside the Northeast where the original chain operated, Tweeter was
directly competing with not only Best Buy and Circuit City Stores Inc. but
even Wal-Mart and Costco Wholesale Corp.—Matthew
Wurtzel
See
Monday's story from TheDeal.com
See
Syre's story from Boston.com
See
earlier post
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