Musicland Group closing Media Play stores

Associated Press

MINNETONKA, Minn. - Musicland Group Inc. is closing its 61 Media Play stores across the country by late January, a spokeswoman said Friday.

Media Play's concept of selling music and other entertainment media in a big-box format had foundered for many years. Minnetonka-based Musicland itself has struggled as the media retailing sector has been buffeted by online sellers as well as discount stores like Wal-Mart.

Liquidating Media Play is unfortunate but necessary, Musicland spokeswoman Lori Bauer said.

"We have not been able to find a niche in the marketplace," she said. "Music, movies, video games, and books all have a lot of competition, and the chain has been struggling for a number of years."

Media Play, which opened in 1992, has 2,000 employees in 18 states, and management staff will receive an unspecified severance package.

Musicland is investing in a major redesign of its Sam Goody chain of mall-based media stores to improve its financial fortunes. Its other remaining chain is Suncoast Motion Picture Company stores.

"We'll continue to operate more than 800 stores between Suncoast and Sam Goody and we'll focus our energies on growing those businesses," Bauer said.

Musicland is also doing a number of other things to expand beyond its core business of music, movies and games, Bauer said.

They include its new Graze stores, which is a store-within-a-store being offered at the Sam Goody store at the Mall of America in Bloomington. Bauer described it as a "lounge concept" where customers can buy a cell phone and load it with ring tones and wallpaper, or burn a CD. Musicland is also involved in a partnership with Bang On, an on-demand apparel company with stores at the Mall of America and in Philadelphia where customers can get custom messages printed on clothing, Bauer said.

Sun Capital Partners Inc., a private investment firm based in Florida, took Musicland off the hands of Best Buy Inc. in 2003 - two years after Best Buy paid nearly $700 million for the group. Sun Capital Partners paid no cash but assumed all of Musicland's liabilities.