WHEREHOUSE ENTERTAINMENT INC

WHEREHOUSE ENTERTAINMENT INC

Previous company name
WEI ACQUISITION CO
Name change date
1/29/1997
Company Overview
Wherehouse Entertainment, Inc., formerly known as WEI Acquisition Co, is a public company engaged in the retail sale of pre-recorded music, video and other entertainment-related products in the United States. The company was founded in 1970 and conducts its business from its registered head office located in Chatsworth, California. It is publicly traded on the Other OTC Market under the ticker symbol WHENQ.
Wherehouse Entertainment’s products include videocassettes, DVDs, video games, personal electronics (including personal stereos, portable stereos, head phones and related merchandise), blank audiocassettes, and accessories. The company also offers rental of pre-recorded videocassettes, DVDs and other products, chiefly feature films. It owns and operates more than 300 stores in the western United States, the majority of which are located in California. The stores operate under the name The Wherehouse, Wherehouse Music, Wherehouse Entertainment, Tu Musica, Xchange, Wherehouse Outlet and Odyssey.
Business Summary
Wherehouse Entertainment, Inc. is a retailer of prerecorded music in the United States. The Company sells prerecorded music, videocassettes, DVDs, video games, personal electronics (including personal stereos, portable stereos, headphones and related merchandise), blank audiocassettes and videocassettes, as well as accessories. During the fiscal year ended January 31, 2002 (fiscal 2002), the Company operated 407 stores in 23 states. Since January 31, 2002, it closed two stores and opened one store. All but 13 of Wherehouse’s stores operate under the name The Wherehouse, Wherehouse Music or Wherehouse Entertainment. The remaining stores operate under the names Tu Musica, Xchange, Wherehouse Outlet and Odyssey.
Description and history
Wherehouse Entertainment, Inc., incorporated in November 1996, is a retailer of prerecorded music in the United States. The Company sells prerecorded music, videocassettes, DVDs, video games, personal electronics (including personal stereos, portable stereos, headphones and related merchandise), blank audiocassettes and videocassettes, as well as accessories. During the fiscal year ended January 31, 2002 (fiscal 2002), the Company operated 407 stores in 23 states. Since January 31, 2002, it closed two stores and opened one store. All but 13 of Wherehouse’s stores operate under the name The Wherehouse, Wherehouse Music or Wherehouse Entertainment. The remaining stores operate under the names Tu Musica, Xchange, Wherehouse Outlet and Odyssey.

Merchandise Sale Products

The Company’s primary revenue source is the sale of merchandise. Wherehouse stores generally sell a broad array of entertainment products including prerecorded music, videocassettes, DVDs, video games, accessories and personal electronics. The percentage of total revenue contributed by merchandise sales was 99.3% in fiscal 2002. The Company’s other revenue source is the rental of prerecorded videocassettes, DVDs and other products. It sells used products, including used CDs, DVDs and games, in the majority of its stores. During the fiscal year ended January 31, 2000 (fiscal 2000), the Company expanded the used CD product line to most of the non-mall Blockbuster Music stores.

Prerecorded videocassettes and DVDs (feature films, music videos and self-improvement programming) represent, after music, Wherehouse’s second largest sale product category. As of fiscal 2002, all but one of the Company’s stores sold prerecorded videocassettes and all stores sold DVDs. As box-office motion pictures continue to be released to the videocassette and DVD sell-through market at reduced prices, industry-wide sales of this category have increased. Wherehouse sells video game hardware and software, blank audio and videocassette tapes, music and video maintenance care products, carrying cases, storage units and personal electronics. It also collects commissions on event tickets sold under an affiliation with Ticketmaster.

E-Commerce

In February 2001, as a result of significant operating losses experienced by CheckOut.com, an Internet content provider and e-commerce retailer of music, movies and games, in which the Company had a 49% equity investment, CheckOut.com ceased operation of its Internet site. To maintain its online retail presence, Wherehouse re-launched its Internet e-commerce site, wherehousemusic.com, in November 2001. The wherehousemusic.com Internet site provides its customers with the same online retail offering that was previously provided by CheckOut.com, as well as used CDs and DVDs.

The Company competes with Trans World Entertainment Corporation, Musicland, Tower Records, Best Buy, Circuit City, Wal-Mart, Kmart, Target, Barnes & Noble, Borders, Amazon.com, CDnow.com, Barnesandnoble.com and mp3.com.

Formerly known as WEI Acquisition Co

Business Line
Engaged in the retail sale of pre-recorded music, video and other entertainment-related products in the United States
Subsidiary

Advisor
DELOITTE & TOUCHE LLP
IPO date
1/31/1997
US SIC Code
5735
Company Address
19701, Hamilton Avenue

City province or state postal code
90502, TORRANCE, CA
Phone: +1 310 965 8300
Fax: +1 310 538 0085
Country address: UNITED STATES OF AMERICA
Website url: www.wherehouse.com