Sunrise Records takes over 70 HMV locations in malls
Toronto company sees a future in vinyl and locally chosen products
In an ambitious and risky investment while many bricks-and-mortar music stores struggle, Toronto's Sunrise Records is taking over 70 stores that HMV is closing.
The new locations are in Canadian malls from coast to coast.
"With HMV leaving, it leaves a big hole in the marketplace," says Sunrise president Doug Putman, "so we just thought it was a good opportunity and the timing was right. So we are going to jump on it and do what we can."
Putman will only say Sunrise is making a seven-figure investment, and he hopes to turn a profit by next year.
He says that with lower head office costs, renegotiated leases and more depth in the record catalogue, Sunrise can succeed where HMV and so many others have failed.
"The reality is there is a large amount of customers that want that physical product that they can touch and hold and have."
Putman says with the renewed popularity of vinyl, "we know there is huge potential there based on our other stores' performance."
"Vinyl will definitely be front-of-store," but he says the stores will also sell CDs, apparel, merchandise and board games.
Putman says allowing managers to make purchasing decisions based on their markets will mean each store will be a bit different.
Canadian music publicist Eric Alper calls the announcement "great news for the music industry." It will create more space for artists to sell records and merchandise, he says.
But Alper sees it as a risky move. "There's always a long-term risk because you never know what the trends are going to be."
He says the key for Sunrise will be how well they maintain their stock. Vinyl can be difficult to get quickly, but the company will have a lot of buying power, he says.
HMV lost $100,000 a day
HMV Canada Inc. went into receivership in January and is closing all 102 stores. According to court filings the company was losing $100,000 a day as customers turned toward online media for their music and videos.
The new stores will start to open in April, and Sunrise plans to have the remainder up and running by midsummer. The company is reaching out to the more than 1,000 HMV employees who will be looking for work.
Sunrise is also interested in reopening a location in downtown Toronto, where it was forced to close two stores in 2014. It has 10 locations in suburban Toronto and rural Ontario.