Music World files for bankruptcy protection
Music World Ltd., a Canadian music store chain, has filed for bankruptcy protection amid stiff competition from the internet and big-box stores.
The chain, which operates 72 stores across the country, was purchased by new owners only last Wednesday from its Toronto-based parent company, Pindoff Record Sales Ltd.
The new owners sought creditors' court protection on Friday, and plan to sell the inventory and some of Music World's more profitable stores, the Globe and Mail reported, citing court documents.
The chain is the latest victim of a music industry in turmoil. In June, Sam the Record Man closed its flagship Toronto store, citing declining traditional CD sales and the vast availability of CDs and digital music from online retailers.
Sales of CDs in Canada fell 35 per cent in the first quarter of 2007 to $68.7 million, from $105.6 million a year earlier, according to statistics from the Canadian Recording Industry Association.
Record stores also face competition from big-box stores which often sell compact discs at a loss to attract customers.
The new owners told the Globe and Mail they hope to close the stores by early next year.
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