All Things Must Pass – The Rise and Fall of Tower Records

dvd_allthingsmustpassThe high flight and quick descent of Tower Records

A five year fall from billion dollar sales to bankruptcy is a startling denouement, but not the message of Colin Hanks’ documentary on Tower Records. At the heart of the story is founder Russ Solomon, the staff he nurtured with his business, and the customers, artists and customer-artists they served for over fifty years. Solomon and crew tell the story of Tower’s rise from a counter in a Sacramento drug store to an international chain, and the technological advances that at first spurred growth, and later conspired with debt-financed expansion to prompt reorganization, bankruptcy and liquidation.

Tower was both a beneficiary and victim of major technological and social changes. Throughout the 1960s and ‘70s, baby boomers came of age, music became a cultural rallying point, and record stores turned into social gathering places. Tower’s first standalone store opened on Sacramento’s Watt Avenue in 1961, and their second on Broadway in 1965; but what really signaled the future was the 1968 opening of the San Francisco store at Columbus and Bay and the 1970 opening of the Los Angeles store on Sunset Blvd. Filled with vast inventory, knowledgeable staff and billed as “The Largest Record-Tape Store in the Known World,” Tower Records was unlike any record shop ever seen.

By the end of the 1970s, Tower had more than twenty stores along the West Coast, and expanded successfully to both the East Coast (with a landmark New York City store), and internationally with stores in Japan. With expansion came opportunities for staff growth, and Solomon actively grew his clerks and junior employees into senior staff and executives. Tower’s CFO Bud Martin provided the corporate yin to Solomon’s more freewheeling yang, but it was Solomon’s gregariousness that set the tone for the company’s culture, and made it “the place to work” for many young people. Each Tower store had its own personality, and within each store the major genres (i.e., rock, jazz, classical) often felt like independent shops.

Tower rode a wave of unparalleled musical creativity and concomitant growth in the record industry. They innovated in advertising, store displays (both inside and outside the stores), and developed the in-house music magazine, Pulse! When a recession hit the music industry in the early ‘80s, Tower’s fortunes were not only salvaged but accelerated by the high price point of the newly introduced CD. The late-80s and 1990s saw profits grow, but also planted the seeds of Tower’s eventual downfall: over-expansion and digital music. The former included unsuccessful stores in Asia and Latin America, and bond financing that would turn into crushing debt. The latter provided the technological foundation that would obsolete physical musical retail.

Even before debt and digitalization took their toll, the entry of mass market retailers – Walmart, Target and Best Buy – created pricing pressure that deflated the CD balloon. Napster may be fingered for triggering piracy (the old saw “how do you compete with free?”), but its real impact was in salting the wound of listeners who wanted to buy songs from an industry that wanted to sell albums. To be fair to Tower, few in the industry saw how quickly MP3s would erode CD sales, or that on-demand services would subsequently erode downloads. Terrestrial retailers born to a culture of collecting couldn’t pivot into a world of networked borrowing.

By 2000, CFO Bud Martin had retired and Russ Solomon had been sidelined with heart problems. Martin’s replacement had taken on debt to fuel expansion, and Solomon’s son Mike had taken the helm. The son hadn’t the magnetic, rallying personality of the father, and with sales flattening (for the first time since 1966), the debt holders instigated management changes whose ideas failed to prevent the downward spiral. The money-making Japanese stores were spun off, the American business pruned of its differentiators, and by 2004 the company filed for bankruptcy and was liquidated in 2006.

Interviews with celebrity customers Bruce Springsteen and Elton John exemplify how dazzling the Tower shopping experience was, and testimony from employees paints a colorful picture of the backroom. There were tears and anger at the end, but the reader board closed the Watt Avenue store on a fatalistic note: “All Things Must Pass – Thanks Sacramento.” Hanks’ 96-minute documentary is more a love-letter than an analysis, as Tower’s impact on local record stores isn’t discussed, and the fate of its peers (Wherehouse, Peaches, Musicland, Virgin, etc.) is unexplored. But for those who spent countless hours roaming the aisles and perusing the stock of Tower stores, this is a love letter worth viewing. [©2016 Hyperbolium]

Tower Records Online
Tower Records Japan