×

Blockbuster bid

Wherehouse makes offer for music chain

Viacom has received a substantial offer for its nearly 400-store Blockbuster Music chain from rebounding retail group Wherehouse, according to sources.

If the $25 million to $30 million deal closes, it would end Viacom’s three-year search for a buyer of the beleaguered Blockbuster music chain and make Wherehouse the industry’s second-largest retailer.

The bid marks the latest offer from potential buyers for Blockbuster, which has also included TransWorld.

Investment bankers Cereberus Partners own a majority stake in the Torrance-based Wherehouse and have aggressively been expanding their holdings in the music industry.

The group, which has taken a look at other chains that have come up for sale, also has a small stake in music retailer National Record Mart.

Wherehouse biggest bid

But the Wherehouse bid, according to sources, has been the largest and puts it at the top of Viacom’s short suitor list.

Execs at Wherehouse and Blockbuster declined comment.

But the deal would add nearly 400 stores to the 220 tally of Wherehouse.

Wherehouse, which successfully emerged from bankruptcy two years ago, has plans to open 10 additional stores later this year. Musicland Group operates a total of 1,363 stores — 703 of which are Musicland/Sam Goody outlets.

Viacom chief Sumner Redstone recently declared Blockbuster’s video operation fixed, and the revenues from the 6,000-store chain helped shore up the conglom’s bottom line in its earnings statement released earlier this month.

Blockbuster Music posts loss

But Blockbuster Music posted a $2.5 million loss on $133 million in revenues, which declined 6.8%. The number of its stores declined to 393 during the year, reflecting the shuttering of 77 unprofitable stores.

The potential sale of the Blockbuster chain comes as its execs have been downsizing its operation since hiring former Musicland exec Larry Gaines as prexy.

Blockbuster’s music operation differs from most music retailers as it typically only stocks top current or hit titles and carries little catalog product.

Gaines was given a mandate to trim overhead and make the chain’s numbers attractive for a sale. Viacom also tapped investment bankers Wasserstein Perella to locate and qualify suitors.

The chain is on the block just as the music industry retail environment has rebounded from previous years and music retailers are at their healthiest.

As a result, the more well-managed chains have once again become darlings of Wall Street.

The stocks of several outfits are trading at top prices and chains such as Camelot and rackjobber Valley Media have prepared public offering statements.

More Biz

  • The dark Manhatten skyline, seen from

    StubHub Refunds $500,000 to Customers Shut Out by New York Blackout

    Saturday’s blackout in New York had an outsized effect on the city’s nightlife, with Madison Square Garden and the entire Broadway district seeing multiple shows cancelled due to the the power outage. As a result, StubHub has refunded more than $500,000 worth of tickets for cancelled events. According to a statement from the company, the StubHub [...]

  • Weapons Cache

    D.A. Files 64 Charges in Bel-Air Weapons Stockpile Case

    The L.A. County District Attorney’s office has filed 64 counts against Girard Saenz, the man who allegedly kept a stockpile of more than 1,000 weapons at a Bel-Air home linked to the Getty family. Saenz is accused of illegal possession of assault weapons, transferring handguns without a dealer license, possession of short-barreled shotguns, and possession [...]

  • 9-1-1: Angela Bassett in the series

    Fox Sees Primetime, Sports Ad Gains As TV Upfront Wraps

    Fox Corporation is the latest to benefit from stronger-than-expected trends in TV ad spending, as the company notched strong gains in advertising commitments for its next cycle of programming – its first since selling off a large chunk of its media assets to Walt Disney. Ad demand was stronger than many executives anticipated, according to [...]

  • BMI Promotes David Levin to Senior

    BMI Promotes David Levin to Senior VP of Licensing

    BMI today announced that David Levin has been promoted to Senior Vice President of Licensing, effective immediately. In his newly expanded role, Levin is responsible for all of BMI’s domestic licensing and revenue generation, encompassing radio, television, digital media, cable, satellite and general licensing.  Levin, who will oversee teams in New York and Nashville, reports [...]

  • Warner Music Group Logo

    Warner Music Acquires Musical Theater Indie First Night Records

    Warner Music Group has acquired First Night Record, an independent record label for West End and Broadway musical theatre cast recordings. The company will be overseen by WMG’s Arts Music Division, led by President Kevin Gore. First Night co-founder John Craig will join the Arts Music team under a multi-year consulting agreement to identify and record musical theatre productions in [...]

  • Woodstock 50 to Hold Open House

    Woodstock 50 to Hold Open House for Local Residents Before Permit Review Tuesday

    If nothing else, the producers of Woodstock 50 are persistent. After two permit applications to hold the troubled festival at the Vernon Downs racetrack in Upstate New York were rejected by the town of Vernon codes office, the producers and venue owner Jeffrey Gural today invited the local community “to embrace the Festival’s spirit of [...]

  • ILM Star Wars The Force Awakens

    ILM to Open Latest Effects Facility in Sydney, Australia

    Sydney, Australia, is to be home to Industrial Light & Magic’s fifth production hub. The Disney-owned special effects company currently has facilities in San Francisco, Vancouver, London and Singapore. The decision to open the Sydney outpost was announced Monday local time by executive creative director and head of ILM Rob Bredow, ILM executive Luke Hetherington, [...]

More From Our Brands

Access exclusive content