Tower Records Parent to File Chapter 11

   NEW YORK (Reuters) - The parent of Tower Records, a high-profile
   recorded music and entertainment retailer, plans to file for
   Chapter 11 bankruptcy protection after failing to find a suitable
   buyer, sources familiar with the matter told Reuters on Thursday.

   The filing by MTS Inc., expected as soon as this week, would cap
   a long period of distress for the privately-held international
   chain of about 100 retail stores, which put itself up for sale
   last year amid declining sales and growing losses.

   MTS declined to comment.

   A Chapter 11 filing would likely involve a debt-for-equity swap
   that would take control of the Sacramento, California-based
   company away from the founding Solomon family, the sources said.

   Like other retailers in the recorded entertainment industry,
   Tower suffers from stiff competition from mass market retailers
   such as Wal-Mart Stores Inc.  (WMT), and high costs from retail
   leases.

"Laurence Sherwood" <[log in to unmask]>