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Business
NRM marking final days

Friday, January 04, 2002

By Teresa F. Lindeman, Post-Gazette Staff Writer

National Record Mart Inc., one of the nation's first music retail chains, shuttered about 40 stores in recent weeks and will likely close the remaining 70 by the end of this month.

"We're at the very end here," said Gary A. Ross, brought in by the bankruptcy court late last year to serve as chief executive officer for the faltering Carnegie-based company.

NRM, which had been reporting declining sales and increasing losses, was forced into bankruptcy last summer by creditors who claimed they were owed millions. Officials hoped a strategy to expand into music paraphernalia might enable a turnaround for the largely mall-based chain. But heavy debt combined with intense competition from mass merchants, discounters and online music services doomed the attempt.

Ross held out little hope yesterday that a last-minute white knight would show up to buy the remnants of the chain, which traces its roots to a small Downtown shop that opened in 1937. Trans World Entertainment Corp., which operates such stores as F.Y.E. and Camelot, bought only six of the NRM store leases and may be hoping to pick up better deals for other locations after National Record Mart closes.

Despite ongoing efforts to sell store leases and the Carnegie headquarters and distribution center, Ross said it was unlikely that there will be money left over to pay unsecured creditors.

At the Carnegie offices, a 70-person skeleton staff has been working to pay bills, work through records and clear out inventory. Store employment had been about 600 in November, but now is closer to 400.

Store locations will be closing through the month, based on inventory levels and sales strength.

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