Tweeter files for bankruptcy

Tweeter Home Entertainment Group Inc. said today it filed for bankruptcy protection.

The Canton-based consumer-electronics chain said its remaining stores will stay open as it looks to restructure operations under Chapter 11.

Tweeter warned last month that it may have to seek bankruptcy protection when it reported a loss of $35 million for the quarter ending March 31, and the company said earlier this year that it would close nearly one-third of its 153 stores and cut about 20 percent of its workforce as part of a restructuring.

Tweeter also said today it has secured a $60-million secured debtor-in-possession credit facility from General Electric Capital Corp.

In a statement, Tweeter chief executive Joe McGuire addressed the bankruptcy filing.

"After considering a wide range alternatives, it became clear that this course of action was a necessary and responsible step to secure our future," McGuire said in the statement. "I am confident that, with our tremendous talent pool of the best-trained, most knowledgeable sales and installation teams in the business, we will emerge from this process as a stronger, more competitive organization that is well positioned to respond to and succeed in the ever-changing consumer-electronics industry."

Tweeter has lost money in its last five fiscal years as consumers have shifted their shopping habits for consumer-electronics products.

The Internet allows consumers to do much of their research on such products online, reducing the need to consult with well-trained clerks at chains such as Tweeter; meanwhile, big retailers such as Wal-Mart Stores Inc. have increased their presence in the consumer-electronics space, and they can use their size and buying power to offer consumers lower prices than smaller chains.

Tweeter said that it filed for bankruptcy protection in US Bankruptcy Court in Delaware.
(By Chris Reidy, Globe staff)