Music retail chain to take over 70 HMV sites

TORONTO — Sunrise Records is placing a major bet on Canadian music sales with plans to move into 70 retail spaces being vacated by HMV Canada.

The Ontario-based music retail chain has negotiated new leases with mall landlords across the country.

Sunrise’s expansion gives the company a quick foothold in the Canadian music scene just as the industry’s largest retailer closes shop. Stores will begin to open this spring after HMV liquidates and removes its signs.

“It’s a good opportunity for us to get a lot more stores open,” Sunrise Records president Doug Putman told The Canadian Press in an interview.

“We think there needs to be a great outlet across Canada to buy music.”

The 32-year-old executive’s investment comes at a time when many are dismissing physical music sales as more listeners shift to streaming options.

Compact disc sales fell 19 per cent to 12.3 million units last year, according to data compiled by Nielsen Music Canada. Meanwhile, on-demand audio streams experienced dramatic growth, rising 203 per cent to 22 billion streams, helped by services like Apple Music and Spotify.

Putman isn’t convinced the data signals the end of physical media.

“A lot of the younger consumers still love having something tangible,” he argued.

Putman has long believed in buying merchandise you can hold in your hands. He grew up working at the family business, Everest Toys, a manufacturer and distributor based in Ancaster, Ont.

He bought the Sunrise chain from Malcolm Perlman in October 2014 just as streaming was going mainstream. Perlman had spent the previous few years shutting down most of the Sunrise stores in the Toronto area, often blaming higher rent.

When Putman gained control of the company, there were five Sunrise Records stores left. He’s since doubled the number by opening in Ontario cities like Ottawa and North Bay. He said all of those stores are profitable.

His approach is a departure from the financials at HMV Canada.

In court documents filed last month, HMV painted the image of a hemorrhaging business where sales were projected to slide to $190 million in 2016, after gradually weakening over the previous couple of years.

Overall, HMV said it was losing $100,000 a day.

Putman said his company won’t lose $100,000 a day when the mall locations open, and he has set a goal of making all stores profitable in 2018.

Former HMV locations factored into the deal represent roughly $100 million in sales, Putman said.

Locations included among the new lease agreements are the twolevel store in West Edmonton Mall, as well as other malls in Burnaby, B.C., Winnipeg, Hamilton, Mississauga, Ont., and Saint Bruno, Que.

HMV currently has a store in Kelowna’s Orchard Park Shopping Centre, but it’s not yet known if Sunrise Records will take over that space when it closes.

The company will outline a more extensive list of stores as the full leases are signed, Putman added.

Sunrise Records will invite 1,340 former HMV employees to apply for 700 positions as it prepares to move into the new locations.