Peter Viney's Blog

15th January 2013 …

Is the unimaginable true? That our last record store is going (for HMV own the specialist FOPP chain too, and that’s limited to a handful of stores in big cities). The BBC News blog suggests that the record labels and DVD producers can’t let it go, or they are in thrall to amazon, and to Apple iTunes. Hopefully some stores will survive. But Jessops, the last big camera store, has just died totally in the face of amazon.

There is a spiral effect. I was speaking to the manager at Zavvi before it crashed, about his experiences at Virgin, FOPP, MVC and Tower before they crashed, and Borders before they dropped music, before they crashed. He pointed out that 10% of the floor area generated 90% of the sales, so conversely 90% of the floor area generated just 10%. Accountants look at profits per square foot. The book and record retailing business can’t work like that, because the mark of quality is the depth of back catalogue. I would check a large store by seeing how many CDs they had by The Band and by Van Morrison, for example. The spiral was that as margins fell, they cut back catalogue (in favour of space given over to two or three for £10 offers). Six or seven sections (classical, country, folk, jazz, easy listening, blues) all got squeezed into a section labelled “Specialist music”. But specialist music is why people go to stores. The top twenty is available at your local supermarket.

Everyone blames the internet, but the rot really started when the labels started supplying the Top Twenty to supermarkets, fifteen or twenty years ago. That was the really dumb move, because specialist stores were either losing the top twenty sales to supermarkets, or having to discount so deeply there was no margin left. The same is happening with books. When supermarkets started selling the Top 20 CDs and (then) videos, “semi-specialists” like Boots the Chemists and W.H. Smith dropped or abandoned their reasonably good music sections, narrowing the market.

No chain record stores let? It happened in America, so why not in Britain? Conditions are markedly worse here for stores because shops are much smaller in area to start with, partly due to high rents and high business rates (local taxes) in town centres. Two friends had a small bookshop and when a large new mall opened, enquired about a shop there. When they saw the weekly turnover required just to pay rents and taxes, they realized it was not viable for two adults trying to earn a living. Only national chains could afford the rentals, by doing all their buying centrally and employing twenty-somethings on minimum wages as “trainee managers” to work in the shops. Which is why such shops are crap.  In Britain, the large floor area of stores in American strip malls is simply unknown.

The surviving independents are in smaller market towns often, and benefit because they’re in premises they own, or have on very long rentals. They survive by knowing what to buy. An example (one repeated weekly). A couple of years ago a Lambchop album got full page reviews in three music magazines, and “Album of the week” in the Sunday Times Culture magazine. Neither HMV had it in stock … “we can order it for you.” Yeah, or I can buy it on amazon. The independent store owner has read the mags, and has it in stock. Our local indie in Wimborne has had all the Levon Helm releases on Vanguard in stock on release. Neither local HMV has ever had them.

The way forward has to be a relaxation of industry rules on secondhand trading. We don’t have stores like Amoeba in California here, because labels will not supply new stock to stores selling secondhand. This is ironic, as HMV started selling secondhand video games themselves last year 9or “pre-owned” as they like to say). A few shops with superb new CD stock are allowed to get away with secondhand vinyl. But they don’t sell secondhand CDs. Whether they should or not is a moot question.

Stores are only interesting if they have a wide range of stock, and that is only possible if suppliers have a generous sale or return policy. Book store reps told me that the superb range at Borders (before they crashed) was only possible because of generous sale or return arrangements, which reps said they thought Borders abused appallingly by allowing customers to take the books into the coffee shop to browse. I remember an incident at Borders in Chicago. The guy at the next table had bought a coffee, and placed the cup on the volume of the Encylopedia Britannica he was reading. He then took a large cold meat and onion roll out of his bag (not bought at the coffee shop) and ate it dropping bits all over the page. As they used to say about the Oxford English Dictionary, in a large sign in the printing works, “one page spoiled is fourteen volumes ruined”. No one wants to do sale or return when the stock is treated like that.

For big stores, CDs and DVDs are way easier than books. They’re normally sold shrink-wrapped in large stores, so don’t get shop soiled in the same way … unless someone wants to hear them. Or as I found last month, a CD is produced with a sleeve without a track list. I had to ask the store to break the shrink wrap, and then I didn’t buy it. For the independent, shrink wrapping to guarantee sale or return can’t work. In Britain, most small stores keep the actual CD or DVD behind the counter and display empty cases because they can’t afford the scanners and door security guards as used at HMV, and CDs are a major shoplifting problem, Again stores say they always end up with some CDs with no cases because people steal the cases to put round downloaded or copied CDRs.

ADDED IN 2019

Added, August 2019

2019 … the Canadian takeover averted another collapse, but the iconic Oxford Street store was among the ones they closed – exorbitant rents, they say.