Tweeter to Close 19 Stores

The store closings and job losses come as the retailer faces increasing competition from big box chains such as Best Buy, Circuit City and Wal-Mart, all of which sell electronics, including big screen television sets, on which Tweeter has built its business. The retailer's sales have remained constant for the last three years at about $775 million.

Joe McGuire, the Canton-based retailer's chief financial officer and interim chief executive, said the store closings were an attempt by Tweeter to pare underperforming outlets from the chain. The 19 stores represent 11% of the company's 177 stores but less than 5% of its revenue and account for 32% of the retailer's operating losses, he said. The stores slated for closure are located in Pennsylvania, Florida, Alabama, South Carolina, Tennessee, Texas, California, Georgia and Arizona.

Tweeter expects costs related to the store closings to be between $25 and $30 million, about $9.7 million of which will be non-cash charges in the form of fixed asset write-offs. The remainder will be incurred from lese terminations, severance and other related expenses associated with the closings.

"By engaging in a process of closing under-performing stores and adding new stores that contribute at a higher rate, we believe we will, over time, increase the performance of the whole fleet, " said McGuire, in announcing the cutbacks.

This year, Tweeter opened four new stores in California, Texas, Nevada and Tennessee and plans four other store openings or relocations in the next 12 months. The chain, however, plans to keep its store count at around 158 until the company starts turning a profit, McGuire said.

The company is working toward that goal.

"We continue to make progress on the balance sheet," he said, noting that the company ended the quarter approximately $44 million in debt, a reduction of $3 million over the prior year. Inventory also was down about $15 million to $109 million over the same quarter last year.