Tower Records was the world's most iconic record store — then it was liquidated in 2006

Tower Records was founded in 1960 by Russ Solomon in Sacramento, California. He had started selling records from his father's drugstore in 1941, and the chain grew to redefine music retail. Tower pioneered the megastore concept with vast selection, late-night hours, and flagship locations — the Sunset Strip in Los Angeles, Lincoln Center in New York, and Piccadilly Circus in London. By the late 1990s it had hundreds of stores across the US, Japan, the UK, and a dozen other countries, and was the most famous music retailer in the world.

The seeds of collapse were planted in the 1990s when Tower expanded aggressively with borrowed money. At the same time, the music retail landscape was being transformed from two directions. Big-box discounters like Walmart and Best Buy sold CDs at or below cost to drive store traffic, crushing Tower's margins. And digital music — first through file-sharing services like Napster, then through Apple's iTunes Store — began to decimate physical CD sales altogether. Tower was caught between price competition it could not match and a format shift it could not stop.

Tower filed for Chapter 11 in February 2004 with between $80 million and $100 million in debt. The company restructured but never recovered. Mismanagement and restrictions from the first bankruptcy deal prevented meaningful change. On August 20, 2006, Tower filed for Chapter 11 again. Great American Group won the asset auction on October 6 and began liquidation immediately. The last US stores closed on December 22, 2006. Tower Records Japan, spun off in a 2002 management buyout, survived independently and still operates more than 85 stores.