New chief says NRM name will fade away
A tradition in Pittsburgh since 1935, the National Record Mart name is likely to disappear by early 2002, the company's new chief executive said Thursday.
Gary Ross, approved last week by a bankruptcy court judge to steer National Record Mart through its Chapter 11 journey, said he is hopeful of selling between 40 percent and 80 percent of the leases and inventory of the remaining 120 National Record Mart stores.
Ross, a former executive with Musicland, which was bought earlier this year by the nation's largest music retailer, Best Buy, said he is determined to get the best deal he can for NRM's creditors and employees.
'We're trying to protect as many jobs as possible,' he said.
NRM was forced into involuntary bankruptcy this summer by its five largest music distributors, who said they were owed $19 million for inventory delivered during last year's holiday season.
The company subsequently filed its own voluntary Chapter 11 petition. Former Chief Executive William Teitelbaum, who led a leveraged buyout of NRM in 1986, had been engaged in talks with Albany, N.Y.-based Trans World Entertainment Corp. regarding the sale of NRM assets before being replaced by Ross.
Teitelbaum also had been attempting to alter NRM's product mix to move away from heavy dependence on music toward an emphasis on novelty items such as posters and lava lamps.
Ross said he is willing to negotiate with more than one acquirer for the stores.
'One chain might not want to have stores in certain geographic areas; whereas another chain might love to have stores in those areas,' he said.
When Trans World acquired the North Canton, Ohio-based Camelot Music chain two years ago, it kept that name on the stores. But Ross said he believes the chances of the National Record Mart name surviving are 'remote.' Trans World operates other music chains, including Coconuts, Strawberries and The Wall.
He said one potential buyer with whom he's had negotiations said it is interested in retaining all NRM store employees and a number of its headquarter employees.
'Confidentiality agreements don't let me say who that is,' he said.
Ross said mega-retailers such as Best Buy and Wal-Mart, along with the downloading of music on the Internet, make it nearly impossible to survive for mid-market players like NRM.
'It's a matter of size,' he said.