[sdiy] Mars Music goes flop - Full Story

[Les Mizzell]

Mars Files for Bankruptcy Protection from Creditors 
 shutters stores in
three markets

The other shoe fell on Friday, Sept. 28 as Mars Music, which had shuttered
nine of its 50 stores in January to trim overhead and seek profitability,
filed for bankruptcy protection in a Florida court.

Mars, with superstores in 14 states, plans to closes stores in Natick and
Somerville, Massachusetts (Boston); Southfield, Mich. (Detroit); and
Memphis, Tenn. According to a report in the Sept. 28 Sun-Sentinel newspaper,
inventory from the locations will be auctioned.

On Sept. 30 the dealership went to court to demonstrate its ability to
continue in business under reorganization. The company stated it had
arranged $60 million in financing that would permit it to meet inventory
needs.

Under Chapter 11 regulations, a company receives protection from creditors
while it attempts to dig itself out. According to the Sept. 28 filing, Mars'
biggest debts include Kaman Music (nearly $900,000), and Roland Corp. ($1.9
million) for its fiscal year ended Jan. 26. Other major creditors are
Fender, Roland, JBL, and Gibson. Mars reported sales of $345.7 million for
last year, assets of $166 million, and liabilities of more than $129
million.

Mars currently employs 300 people at its Fort Lauderdale, Fla. headquarters
and a total of 1,750 nationwide. In addition, the dealership works with
about 700 teachers who give lessons on an independent contractor basis.

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September 28, 2002 -- According to a recent report by the Miami Herald, the
Mars Music (www.marsmusic.com) superstore chain filed for Chapter 11
bankruptcy protection on Friday.

After a successful stint as the president of Office Depot, Mark Begelman
stepped down and decided to combine his love of music with a new business
venture, creating Mars Music. Beginning with the acquisition of a small
chain of Florida-based music stores in 1996, Mars pursued a very aggressive
expansion plan, building dozens of superstores through the South and some
far reaches of the US, complemented by an e-commerce web site. At it's peak,
Mars Music consisted of 50 stores, but had already reduced its size down to
41 stores by the time of the Chapter 11 filing.