Sunrise Records ready to take over HMV stores
Company banking on ‘resurgence’ in market for vinyl and CD formats
Sunrise Records is betting big on the resurgence of CD and vinyl LP sales as the independent Ontario chain prepares to take over close to three-quarters of the storefronts vacated by insolvent HMV Canada.
Toronto-based Sunrise, which opened its first store in 1977, has managed to survive through the industry bloodletting that led to the demise of big and small music chains in North America. The nine-store chain announced over the weekend that it will take over 70 of HMV’s closing locations, and encouraged that chain’s employees to apply for jobs at the new stores.
“We have a belief there is a resurgence coming in the physical market,” said Doug Putman, president of Sunrise Records, citing the retailer’s solid sales of CDs and LPs despite more than a decade of steadily rising digital music sales. “As an industry (sales of physical music products) are shrinking, but we are not seeing that from a Sunrise perspective.”
Putman purchased the thenstruggling Sunrise chain in 2014. His move to capitalize on the void left by HMV required him to negotiate individually with landlords. “It is a seven-figure investment, but we see a way for (the business) to be a profitable chain.”
It defies the odds in an industry that has seen the death of strong independent chains such as A&B Sound and Sam the Record Man. HMV, the last remaining music retailer of its size in Canada, an- nounced in January that it would close all of its 102 stores across the country. Sunrise will begin opening inside former HMV locations in April.
Much like HMV and Indigo, Sunrise has broadened beyond its core base of products to include a variety of non-core products such as licensed fan apparel, movie and TV memorabilia and board games.
Sunrise gets 60 per cent of its sales from music and 15 to 20 per cent from DVDs, with the remainder falling under the “other” category, which Putman would like to grow to 30 per cent or more of sales. “We are seeing (CD) increases in the single digits, which is nothing crazy, but for an industry that posted a 20 per cent decline on CD sales, for us to show any growth we think is pretty amazing.”
Vinyl has done even better, he said, outstripping the 30 per cent growth rate in the industry. “The business is triple for us what it was two years ago,” Putman said.
Stepping into vinyl early relative to other players, about seven years ago, also helped Sunrise establish itself among independents as a place for vinyl, experts say. Sunrise’s managers are encouraged to curate record sections to target the musical tastes of the local markets.
“This is a bold move,” said Eric Alper, a veteran music writer and publicist. “I think if they listen to how their customers want to consume physical products, going big on this could bode well for them.”