Tweeter Home Entertainment Group, Inc., believes that it does not have sufficient working capital to fund its short-term needs, the company disclosed in a press release posted on their website.
The short-term needs includes items such as payment of costs associated with store closings, lump-sum payments to landlords of closed stores with whom it reaches settlements, and to fund its long-term cash needs.
The company had previously said that it was closing 49 stores as "part of a restructuring plan with a long-term goal of eliminating unprofitable stores."
The company says it is pursuing other alternatives for raising additional capital that could take the form of debt or equity, but there can be no assurance that additional debt or equity will be available on acceptable terms or at all. Any equity financing however, could result in substantial dilution to existing stockholders.
Absent obtaining additional capital or reaching adequate settlements with the landlords of its closing stores, the company may choose to file for reorganization under Chapter 11 of the bankruptcy code.
Based in Canton, Massachusetts, Tweeter Home Entertainment Group,
Inc. (NASDAQ: TWTR) -- http://www.twtr.com/ --
and -- http://www.tweeter.com/ --
was founded in 1972 by the Company's Chairman, Sandy Bloomberg. The Company is a national
specialty consumer electronics retailer providing home and mobile entertainment solutions. The company operates 147 stores
under the Tweeter, hifi buys, Sound Advice and Showcase Home Entertainment names. The Company's stores are located in the
following markets: New England, the Mid-Atlantic, Chicago, the Southeast (including Florida), Texas, Southern California, Phoenix
and Las Vegas.
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