Tower/16″/dt1st/mark2nd By SHELLY GARCIA Staff Reporter As the once-popular Sherman Oaks Galleria tries to reinvent itself, it’s perhaps appropriate that its anchor tenant will be a retailer that is attempting to do much the same thing. Tower Records will open a huge, 50,000-square-foot flagship store in the complex at Ventura and Sepulveda boulevards. The store, set to open early in 2001, will occupy two floors at the Galleria. It will have an enormous inventory of compact discs, tapes and videos, a full-line bookstore and newsstand, and a cafe/restaurant. It is one of several big-box stores that Tower expects to build in the next few years others are planned in Brea, Houston and Hawaii as it tries to combat the onslaught of competition from both brick-and-mortar and Internet music retailers. “This store is going to have everything, the largest of anything in Los Angeles,” said Michael Solomon, president of MTS Inc., Tower’s corporate parent. Ironically, the 39-year-old chain was a pioneer in the concept of category-killer retailing. In 1968, Tower counted among its shops one of the largest music stores in the country, an 8,000-square-foot unit in San Francisco. But stores that had been so large by past standards now operate in the shadow of Barnes & Noble and Borders Books and Music. And a range of newer retailers is chipping away at a business that Tower had dominated, including chains specializing in used CDs, discounters such as Best Buy and e-commerce companies like Amazon.com and CDNow. Growth at Sacramento-based Tower, a $1.1 billion chain with 221 stores worldwide, has been slow, company officials concede. “Competition is part of it,” said Solomon, son of the company’s founder, Russell Solomon. “Also, we have a lot of mature stores. It’s hard to get incremental growth out of a store that’s been open for 15 years.” The square footage available at the Galleria, coupled with its location at the intersection of the San Diego (405) and Ventura (101) freeways, were determining factors in its selection by Tower. “On the West Coast, we’ve had our flagship on Sunset (Boulevard) in West Hollywood,” Solomon said. “In essence, that’s still a flagship store, although we’re looking to do something special in Sherman Oaks.” In addition to listening stations, the store will incorporate some aspects of the Internet, with computer kiosks that will allow shoppers to download information and music. The expanded selection and other offerings make sense for brick-and-mortar retailers. “E-commerce has clearly changed the landscape for many retail categories,” said Henry Jackson, managing director at Peter Solomon Co., a New York investment banking firm. “Given that, you need to make the in-store experience different and better.” Others agreed that Tower must distinguish its stores, particularly in the field of books and music, where e-commerce has made some of the strongest inroads against brick-and-mortar retailers. “It’s not tomatoes,” said Sanford R. Goodkin, whose company, Sanford R. Goodkin and Associates, specializes in strategic consulting for retail and other companies. Unlike other products sold on the Web, Goodkin said, consumers “don’t have to feel it and smell it. They can browse as easily on the Web site, so music CDs are fair game for that.” Still, a large store that stocks a vast inventory offers customers something the Web can’t provide the chance to take home purchases immediately. And as the music industry moves toward digital downloading as an alternative method of selling music and even books, Tower may be able to offer a more appealing environment than sitting in front of a home computer. Solomon won’t divulge specifics on the cost of the store build-out, but he says that privately held Tower plans to spend “a lot. It makes me cringe to think about it.” Tower is expected to be the largest retailer at the Sherman Oaks Galleria, which is being transformed by Douglas Emmett Co. from a traditional mall to an entertainment-oriented retail and office complex with an 18-screen movie theater. The company’s leasing agent, CB Richard Ellis Inc., is currently negotiating with a number of restaurants, which are expected to account for between 100,000 to 200,000 square feet of space in the 880,000-square-foot complex.
