Musicland Files for Bankruptcy

Following the closing of the national chain of Media Play stores, the Musicland Group, which owns the Sam Goody and Suncoast retail chains, yesterday filed for chapter 11 bankruptcy protection. Sam Goody and Suncoast stores will remain open and operating during the bankruptcy period, but reportedly the Musicland Group will not pay vendors for any product invoiced during the bankruptcy period.

ICv2 News has confirmed that Suncoast stores have removed their manga inventory and will not carry manga this year, and both Sam Goody and Suncoast stores have liquidated their existing DVD inventory. “Anime producers are concerned that it will find its way back to them as returns from customers that buy it at steep discounts, or that it will be sold at retail at reduced prices, sopping up demand for full-price merchandise.”

ICv2 also reports:

Any company that had been selling to Suncoast is unlikely to be paid for product delivered before the filing any time soon, if at all, and manga producers are going to see significant quantities of returns.

The impact on the manga companies is also going to be significant. Although not as big a percentage of the manga market as it is of the anime market, Musicland accounts for 5% to 15% of the market, depending on the publisher and title.

The Musicland bankruptcy is expected to have little long-term effect on the American anime and manga distribution industry as other competing retailers are expected to absorb Musicland’s share of the market.

Source: Video Business Magazine