Dow Jones writes that Tower's revenue fell to $430 million for the fiscal year ending July 31 from $476.1 million the previous year.

Like other brick-and-mortar music and book stores, Tower has faced significant competition from online retailers as well as discount chains. According to Dow Jones, music industry specialists feel the company will find it difficult to locate a buyer up to the challenge of operating a company facing such competition. Phil Leigh, a senior analyst for Inside Digital Media, Inc., told the agency that the Tower brand has value and will find a buyer, but its stores will be probably be closed.

Tower Records management, on the other hand, told Dow Jones that it has seen "substantial interest among potential buyers" and intends to keep the brand afloat.

This news isn't entirely unexpected. The Los Angeles Times reported earlier in the month that Universal Music Group, Warner Music Group and EMI Music had suspended CD shipments to the Sacramento-based chain after it stopped paying its bills. Sony BMG had also reportedly stopped shipments, although the paper was not able to confirm it at the time.

Tower Records, which also came close to bankruptcy in 2004, recently appointed crisis management and bankruptcy specialist Joseph D'Amico as chief executive.

The company was founded in 1960 when music enthusiast Russ Solomon began selling records out of his father's Sacramento drugstore basement. Tower built multi-level stores staffed by expert staff, but ran into trouble after a mid-1990s expansion was less profitable than expected due to competition from retailers such as Wal-Mart, and more recently, from online stores such as Amazon.com as well as the revolution in downloading music in digital files rather than purchasing it on discs.