Late last week, whispers began to surface about the fate of HMV. Virtually every record label in the country had been conspicuously silent on the impending death of the country and the subtraction of 102 retail outlets for physical product. Losing so many stores would constitute a major hit for distribution of CDs, vinyl, DVDs and other related material. It would be a huge blow for Canadian product to Canadians. And then there’s the accounts receivable issue. Would the labels ever see any money from the remaining HMV inventory?
But no one was saying anything. Total radio silence–except for those whispers. Was there some kind of backroom plan to save HMV from certain death? Or was something else in in the works? It looks like it was option B.
Late Sunday (February 26), it was announced that Sunrise Records, the Ontario-based chain headed up by 32-year-old Doug Putman, had negotiated deals with malls across the country to take over HMV leases. The new stores will open in the spring after HMV’s wind-down ends on April 30.
So who is this guy? And why does he think he can fair better than HMV in a market where CD sales fell 19% last year?
Putman is from Ancaster, Ontario, and worked in the family toy business, Everest Toys (suppliers to both Hasbro and Mattel), before buying the Sunrise chain from Malcolm Perlman in 2014. At that point, Sunrise looked like it was in big trouble as it shut down locations, especially in the Toronto area. There were just five locations left.
Since then, though, Putman has opened four more and all of them, he says, is profitable. The HMV lease deal will give Sunrise 80 locations and an instant national footprint. That includes Hamilton (Limeridge Mall), Edmonton (that’s a 20,000 sq. foot two-level store), Mississauga (Square One), Winnipeg (Polo Park) and a few other smaller markets. A full list of stores will be released once all the leases are signed. He wanted all 102 HMV outlets, but some malls wanted out of the record store business and the real estate for the HMV flagship store at 333 Yonge Street is just too expensive–although Putman won’t rule out some kind of street-level presence in Toronto sometime in the future.
Here’s what he told the Canadian Press:
It’s a good opportunity for us to get a lot more stores open. We think there needs to be a great outlet across Canada to buy music…A lot of the younger consumers still love having something tangible.
The plan is to make all stores profitable by the end of next year. How? By going beyond the selection of music and music-related stuff offered by HMV. More vinyl, perhaps. A tiny investment in cassettes (there’s a slice of the market that still loves them). More swag and merch. Clothing. Toys.
In a nice touch, Putman will invite the 1,340 HMV employees who are losing their jobs to apply for about 700 new Sunrise gigs. (There will be something here when the time comes.)
I’m rooting for Sunrise. The Canadian music landscape needs a national chain if it’s going to stay healthy.
More coverage here.