HMV Canada closing stores nationwide

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HMV Canada closing stores nationwide
THE CANADIAN PRESS
First posted: Friday, January 27, 2017 06:30 PM EST | Updated: Friday, January 27, 2017 06:46 PM EST
TORONTO — An Ontario Superior Court of Justice approved an application to place hmv canada into receivership on Friday.
HUK 10 Ltd., which lent money to the struggling chain, filed the application to the court Thursday.
It claimed HMV owes it nearly $39 million and has received no cash payments since Nov. 2014.
HMV would require between $2 million and $5 million annually in cash to stay open, according to court filings, and the company was losing $100,000 a day as customers turned towards online media in recent years.
Senior Justice Geoffrey B. Morawetz approved the application and appointed Gordon Brothers Canada ULC and Merchant Retail Solutions ULC as the agent to sell HMV’s remaining merchandise.
Legal documents state that closing stores must cease operations by April 30.
HMV operates 102 stores in Canada and employs about 1,340 people, most of them at its retail locations.
HMV Canada closing stores nationwide | Canada | News | Toronto Sun

 

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HMV's closure end of an era

By Liz Braun, Postmedia Network
First posted: Saturday, January 28, 2017 06:36 PM EST | Updated: Saturday, January 28, 2017 06:46 PM EST
TORONTO - April 30 may be remembered as the day the music died — physically speaking.
HMV is bankrupt. When the retailer closes its doors in three months, it marks not only the end of a once-mighty chain, but another loss in the bigger food chain known as the music industry.
As fewer people invest in CDs and DVDs, able to stream or download the music and movies they want, retail outlets such as HMV will continue to move toward extinction.
On Jan. 27, an Ontario Superior Court of Justice approved an application to place HMV Canada into receivership. The application was filed by HUK 10 Ltd., which is a subsidiary of the U.K. restructuring company Hilco UK, which bought HMV in 2011. The Canadian HMV has been a separate business entity since that date.
Despite making money through 2013, HMV stores in Canada saw falling sales thereafter. The heavily indebted retailer owes $39 million to the restructuring firm and has made no payments on debt in more than two years.
According to CP, court filings make it clear that to continue in business, the stores would need $2 million now and another $5 million every year in financial support, a situation described as unsustainable. Losses at the stores are estimated to be $100,000 a day.
An agent has been appointed to sell HMV’s remaining merchandise.
To a particular generation, the closing of HMV stores represents the end of an era.
It only took about 50 years for the public to move from the 12” vinyl LP — through 8-Track, cassette, CD and online purchase — to streaming via giants such as Tidal or Apple Music.
And the endless supply of ‘free’ music to consumers has obviously played a role in the end of retail sales.
What happens next is always interesting. Just as streaming sounded an eventual death knell for paid downloads, technological advances continue to put the music industry in a situation of market cannibalization. Each new thing grabs a portion of the old audience, leaving musicians and record label executives in the background scrambling to figure out how to value artists’ work and make a living.
Ironically, vinyl albums are one entity in the world of recorded music showing an uptick in sales in recent years.
Maybe it’s nostalgia.
Maybe it’s the need to own one’s own library versus the potential impermanence built into streaming services.
Even Apple founder Steve Jobs himself didn’t like streaming, and once said that people want to own their music, not ‘rent’ it.
Those still interested in that ownership will find HMV clearing their remaining stock through April 30, the date when 102 Canadian stores will close for good.
lbraun@postmedia.com
HMV's closure end of an era | Braun | Canada | News | Toronto Sun

 

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Sunrise Records takes over 70 vacant HMV locations
David Friend, The Canadian Press
First posted: Sunday, February 26, 2017 04:18 PM EST | Updated: Sunday, February 26, 2017 06:08 PM EST
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% 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% 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.
“It’s an absolutely huge number,” Putman said.
“But we’ve been able to find a way, working with landlords and our suppliers very closely, to mitigate that.”
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 two-level store in West Edmonton Mall, as well as other malls in Burnaby, B.C., Winnipeg, Hamilton, Mississauga, Ont., and Saint Bruno, Que.
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.
The company was unable to reach new terms for about 30 of the closing HMV stores, Putman said, including the company’s flagship location at Yonge and Dundas streets in Toronto. Some landlords weren’t interested in a “pop culture” chain, he said.
Staying ahead of trends will be one of the biggest challenges Sunrise faces as it defines itself as a hybrid music retailer and cultural merchandiser.
Aside from CDs and DVDs, Sunrise will hedge its bets with board games, themed toys and a wide selection of music, film and TV apparel.
HMV tried that strategy too, but Putman believes he can do it better with a broader selection. He’s also putting a major focus on growing interest in vinyl records, which will be placed at the front of stores.
Vinyl sales grew 29% last year to over 650,000 units, and Nielsen figures show growth this year remains steady.
Sunrise will also tap into other popular slices of nostalgia, like audio cassettes. Sales of tapes jumped 79% to about 7,000 copies last year.
Putman said the company won’t invest much in tapes, which he considers as a “niche market,” but said Sunrise already stocks a number of cassettes and tape players.
Yet not every factor will be within the new owner’s control.
Record labels are making seismic shifts in their priorities with a stronger focus on how digital sales drive music charts.
Some of last year’s biggest hits, including Beyonce’s Lemonade and Drake’s Views, were released under a digital-first strategy. Streaming and download services had the album weeks before record stores.
Other albums, like Grammy winner Chance the Rapper’s Coloring Book and Kanye West’s Life of Pablo, went without a physical release at all.
Putman hopes those examples remain anomalies, though he said those hurdles are just part of navigating an evolving industry.
“Is the business the same today as it was five years ago? Of course not,” he said.
“And it’s going to be very different in three years. It’s up to us to adapt and change.”
Sunrise Records takes over 70 vacant HMV locations | Canada | News | Toronto Sun

 

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Record shops alive and well in T.O.

By Jim Slotek, Postmedia Network
First posted: Sunday, March 05, 2017 04:24 PM EST | Updated: Sunday, March 05, 2017 04:38 PM EST
Whatever else HMV’s recent descent into receivership may represent, it wasn’t “the day the music died.”
Record stores across the country — including Sunrise Records, which is gambling on a takeover of 70 former HMV locations — report a boom in the good old-fashioned vinyl format, both used and new.
And Sunrise has announced that, in its new surroundings, it will be “vinyl first.”
Indeed, Forbes magazine reported that 2015 (the last year for which they have statistics) saw a 32% increase in new vinyl sales to just over $400 million.
Kops Records — which bills itself as “the oldest independent record store in Toronto” (40 years at its Queen St. W. location) — expanded to Bloor St. in 2013 and Danforth in 2015.
“Anywhere from 75-80% of our vinyl is new,” says Andrew Koppel, who operates the stores with his brother, Nick, and their dad, Kops, founder Martin Koppel.
“We’re placing orders every day, restocking. The only issue is that some of the Grammy-winning artists have not had vinyl releases, which is a bit frustrating for customers.
“And some put out vinyl, but it’s limited. Beyonce’s Lemonade, we sold out of that almost instantly. And Drake’s Views we sold out of that.
“The frustration is there’s often a three-week to three-month delay between the digital release and the vinyl release — which is also frustrating for customers because they’re able to listen to it online and they want to be able to own a physical copy and they can’t get it.”
Being unable to keep up with demand is not exactly the sign of a business on death’s door.
But the music industry has died many deaths in the past 30 years or so. There was a time when the sale of used records and CDs were considered a huge threat to the recording industry, contributing nothing to royalties and robbing from the artists.
Then came cassette tapes, which were also seen as an existential threat.
But CDs represented both boom and bust for the record industry. From the mid-’80s to the late-’90s, people paid top dollar for supposedly pristine digital copies of albums they’d previously bought on vinyl. The year 1999 saw the phenomenon peak with more than $14 billion in total music sales.
However, CDs also had one of the most disastrous design flaws in history. Anyone with a computer could copy them. Worse, people could upload and download that data off the Internet. By the end of the next decade, revenue had dropped by two-thirds.
The fatal embrace of CDs killed some major retailers in the record industry, and mortally wounded others. Dan Wright, now an inventory manager at Chapters-Indigo (which has seen robust sales of portable turntables in the past year), worked at Yonge St.’s legendary Sam The Record Man in the 1990s.
“When I was there, it was the big switch where vinyl was phasing out and CDs went from nothing to basically the whole store,” he recalls. “At one point, they acquired the bank space on the corner next to the store and expanded into that. And then CDs took the big hit.”
He remembers Sam’s fondly as a place where music lovers came, literally from around the world, to talk to some of the most knowledgeable staff anywhere.
“You had your classical nerds and your jazz club. And that kind of reflected the philosophy of the store. You tried to carry at least one of everything that was available.
“The people on the floor had a lot of opinions, and they got into some really great dialogue with the customers. I like to say it was the best job I ever had that never really paid a whole lot.”
Favourite Toronto record store then (From an unscientific social media poll) :
1. Sam The Record Man — Yonge St. Closed 2007. (Author’s note. A frequent customer when I’d visit from Thunder Bay, I opted to study journalism at Ryerson because it was behind Sam’s. Seriously.)
2. Vortex Records — Various locations. Closed 2015.
3. Peter Dunn’s Vinyl Museum. Various locations, including Yonge St. Closed 1999.
4. A&A Records — Yonge St. Closed 1993.
5. Records On Wheels — At one time, it operated out of a bus. Later a beloved Yonge St. institution. Then the owners moved into distribution, and the company morphed into the entertainment company eOne.
6.The Record Peddler — Various locations, including Queen W. Closed 2001.
7.Ed’s Record World — Yonge/Eglinton. Closed 2007.
8. Round Records — Bloor/Bay. Building demolished 1979.
9. Tower Records — The now-defunct L.A. institution, operated on Yonge St., from 1995 to 2001.
10. Music World — Once a chain of 72 stores across the country (and the last Canadian-owned national music chain). Closed 2008.
Favourite record stores now
1. Kops Records — Three locations, including 229 Queen W.
2. Soundscapes — 572 College St.
3. Mike’s Music — 105 Danforth
4. Dead Dog Records — 1209 Bloor W.
5. Paradise Bound — 270 Augusta Ave.
6. Sonic Boom — 215 Spadina Ave.
7. Rotate This — 182 Ossington Ave.
8. She Said Boom — 372 College St.
9. Discovery Records — 1140 Queen E.
10. In The Groove — 1174 Queen E.
Record shops alive and well in T.O. | SLOTEK | Home | Toronto Sun

 

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Sunrise Records reveals which HMV locations it will take over
THE CANADIAN PRESS
First posted: Thursday, March 09, 2017 01:05 PM EST | Updated: Thursday, March 09, 2017 01:09 PM EST
TORONTO — Sunrise Records is revealing more of the locations where it plans to open stores.
The Ontario-based company confirmed a batch of malls on Thursday where it will replace closing HMV retail spaces. Sunrise says some of them could begin operating within a few weeks.
Details come after the company revealed last month it would move into 70 retail spaces being vacated by HMV Canada as it shuts down all of its stores across the country.
In British Columbia, Sunrise will open two locations in Burnaby, while Alberta will have stores in Fort McMurray, Lethbridge and Medicine Hat. Two locations in Calgary, and another in Edmonton will be added to the previously announced two-level store in West Edmonton Mall.
Manitoba will have two Sunrise locations in Winnipeg, while Saskatchewan will get one in Regina.
In Ontario, Sunrise will open stores in Belleville, Guelph, Hamilton, Mississauga, Ottawa, Owen Sound, Pickering, Sault Ste. Marie and St. Catharines, alongside its existing stores in the province.
Quebec will see six stores across Hull, Quebec City, Saint Bruno, Saguenay, Trois-Rivieres and Victoriaville.
Two stores are planned for New Brunswick in Saint John and Fredericton.
Sunrise says it will reveal the rest of the planned locations starting March 20. Stores will begin opening in early April.
Sunrise Records reveals which HMV locations it will take over | Money | Toronto

 

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Canada's Sunrise Records buys U.K.'s struggling HMV chain
Canadian Press
Published:
February 5, 2019
Updated:
February 5, 2019 6:05 PM EST
File photo of an HMV store.NIKLAS HALLE'N / AFP / Getty Images
TORONTO — If Sunrise Records and Entertainment Limited wants the 100 HMV stores it just purchased across the U.K. to succeed, industry experts say it will need to get creative and quick.
The music retail landscape has been plagued in recent years by the rise of streaming platforms and the dramatic decline of CDs and DVDs, making ventures like the one Sunrise is embarking on tough, said music analysts.
They predict Ontario-based Sunrise, which operates 84 stores mostly in Canadian suburban malls, will have to diversify its offerings to keep the HMV locations, 1,847 employees and four Fopp stores it just bought afloat.
Mark Mulligan, a music analyst from Midia Research in the U.K., said Sunrise and HMV must focus on “monetizing fandom,” by selling merchandise from games, TV, music and film, and perhaps even consider turning stores into live music venues.
“They shouldn’t fight an epic, losing battle trying to compete against the streaming giants…Assuming they want to have a long-term vision, rather than three to five years of getting a bit smaller every year, they need to find new areas of growth,” Mulligan said, noting that even games and DVD box sets, which used to be popular items at HMV and Sunrise, have faced challenges from streaming services and direct-to-console businesses.
“They have a long tradition of having bands come in and having performances, well, take that one step further and make it a place that people spend time with coffee and beer.”
Sunrise Records was not able to provide a representative for an interview by time of publication.
It said in a press release that 27 HMV stores were not included in the last-minute deal it struck and will be closed immediately, causing 455 “redundancies.”
However, the release said Sunrise president Doug Putman was “delighted” with the deal and the prospect of being able to “replicate our success in Canada.”
Putman, who also runs toy and game distribution brand Everest Toys, has spent the last few years turning around Sunrise, which he acquired from Malcolm Perlman in 2014, when Sunrise was down to five stores.
Putman took advantage of the closure of HMV locations in Canada and grew Sunrise significantly, stocking it with CDs and DVDs, but also board games, themed toys and a wide selection of music, film and TV apparel — a strategy HMV had also dabbled in.
Vinyl became a key offering too, as Putman tried to take advantage of its resurgence.
Mulligan called vinyl “a good news story,” but said Sunrise and HMV shouldn’t lean too heavily on it because he considers it a “niche segment” of the music retail market.
He also said if Sunrise bought HMV to profit from its real estate, timing isn’t on Sunrise’s side. The U.K., he said, has seen a “strong decline” high street real estate over the last decade, making the store locations less lucrative.
Canadian music industry expert Eric Alper doubts real estate was on Putman’s mind with this deal because Putman has a history of crusading to keep the Canadian music retail industry viable and hasn’t flipped Sunrise properties that were bought from Perlman.
“I see them doing a lot more in terms of outreach in the community than anyone had the right to expect from them,” said Alper, noting Sunrise has built a presence at fan fairs, music conferences and record days throughout Canada.
Alper believes Sunrise should look towards partnerships with artists and exclusive merchandise to bring in customers.
The strategy has already been used by Canadian rapper Drake, who has begun flogging merchandise at a string of OVO stores, while Toronto-born singer Shawn Mendes has partnered with Roots to sell a limited edition clothing line, including sweatpants, leather jackets and toques.
“There is no reason why Sunrise Records can’t start going into every single artist possible and designing and making exclusive merchandise or albums only available at HMV in the U.K.,” he said.
Mulligan said he believes Sunrise has a 50-50 shot at success with its HMV deal because the brand previously failed at dealing with piracy, iTunes, Spotify and Amazon, but Alper said he is more of an optimist.
“The music industry itself is not dropping. It is just us finding a different way for us to consume music,” Alper said.
“People still like to walk around and shop. Indigo has been able to do quite well with their stores having home merchandise and there is no reason Sunrise can’t do the same thing for customers, who don’t want to buy physical music anymore, but still want to show off their love of an artist.”
http://torontosun.com/business/money-news/canadas-sunrise-records-buys-u-k-s-struggling-hmv-chain