Nikko Principal Investments Corp., an affiliate of Nikko Cordial Corp., plans to buy all of the shares of Tower Records Inc. from its U.S. parent company MTS Inc. by around May, a spokesman at Nikko Cordial said Friday.
An investment company jointly set up by NPI and the management of Tower Records will make the investment under a management buyout for roughly 15 billion yen, the spokesman said.
NPI will dispatch personnel to Tower Records to give advice and will try to boost the independence of the retailer's operations in Japan, the spokesman said.
"We will try to enhance the brand name of Tower Records and look to offer shares to the public in the future," he said.
MTS, based in Sacramento, Calif., currently operates 172 record retailers in eight countries under the Tower Records brand.
Tower Records started operations in 1979 and currently has 51 shops in Japan.
The Nikko Cordial spokesman said Tower Records is doing well, with sales in Japan accounting for about 40 percent of sales of all Tower Records shops held by MTS.
"Tower Records is very profitable and we want to make it even more so by expanding operations," the spokesman said. "We know that big shops such as the one in Shibuya (Tokyo) do very well, and so we will be investing in shops with large floor space."