The U.S. Bankruptcy Court in the Southern District of New York today approved Trans World Entertainment’s acquisition of 400 Musicland stores. The deal is expected to close by March 27.
As soon as Trans World assumes ownership, it will turn over 65 stores to Hilco Merchant Resources, a liquidating firm that will conduct going-out-of-business sales. That will leave Trans World operating about 335 of Musicland’s stores. Trans World chairman/CEO Bob Higgins says that number is split between Suncoast video outlets and Sam Goody stores.
Trans World and its liquidating partner in the transaction are paying $104 million for the Musicland stores. When the acquisition deal was signed in mid-February, the stores had an inventory valued at about $168 million. Trans World has said it will use cash and bank debt to pay for the stores.
Trans World is assuming $18 million in Musicland liabilities, and will also pick up Musicland’s online stores as part of the transaction. Earlier in the bankruptcy proceedings, Trans World agreed to buy six Media Play stores.
The deal will give Albany, N.Y.-based Trans World about 1,125 stores. The company is expected to achieve sales of $1.6 billion in its current fiscal year.