Tower Records set to franchise all its UK stores

Tower Records is to retain a UK presence, but will franchise its British stores rather than operate them directly.

Earlier this month, US parent MTS secured a US$110 million (£71 million) three-year refinancing deal and changes in how the British arm operates are now planned.

According to one member of the UK management, who asked not to be named, the retailer is looking for a franchise partner to take over the running of its stores in Kensington and Piccadilly, London.

In the UK, Tower Records has closed four shops of its eight since August and aims to reassign leases on shops in Southampton and Whiteleys Shopping Centre in London. The source said: 'Refinancing had to take place. Tower is here to stay, but not necessarily the parent company.'