Troubled Austin, Tex., audiobook retailer Earful of Books Inc. has filed for Chapter 11 bankruptcy protection in the western district of Texas. "Because we're in Chapter 11, we're still looking at potential buyers for the company as a whole, for individual stores and for inventory," said Russell Grigsby, chairman of Earful's current four-person board. "We expect this to be done in about three or four months and are helping to guide the attorneys in these matters. It's a complicated situation and things have been hard not having any established [Earful] employees to work with." The company ceased operations, locked out employees and closed its six corporate-owned stores in Texas in April (News, Apr. 29).
Grigsby, who joined the Earful board in September 2001, stresses that the audiobook-only retail climate is not to blame for Earful's demise. "I believe that it's a great idea," he said. "This situation is not related to the volatility of individual stores or the concept. The former chairmen made some decisions about how to aggressively grow the business that got it into financial trouble." He refers in part to Earful's reverse merger with American Absorbents Natural Products, which was completed in 2001. "The reverse merger was a lot more expensive and a lot less productive than they thought it would be," Grigsby explained. "It could have worked, but it proved to be very poor timing with the [financial] market and the economy, and we could not turn it around."
At present, a handful of franchise stores, including outlets in Arlington, Tex., Beaverton, Ore., Roanoke, Va., and Rockville, Md., continue to operate under the Earful of Books banner and will do so until they hear of any new developments from Grigsby or Earful's attorneys. Arlington store-owner Peggy Lively commented, "Unfortunately, we're still in the dark about all this and have not officially heard anything, so we just keep on keepin' on."
