Ironically following the announcement of HMV Canada's exit from the music retailing business, another music retailer has confirmed plans to take over many of the vacated locations. Sunrise Records says it plans to move into 70 of the former HMV Canada stores once they close.
Based in Ancaster, ON, Sunrise Records has already negotiated leases with mall landlords across Canada, and the new store locations are expected to begin opening up this spring, shortly following the HMV closures.
In January, HMV Canada confirmed that it would be closing all 102 of its retail stores across the country, as it entered receivership. Inventory is currently selling for 30% off, and all locations are set to close by April 30.
Clearly, while the news of Canada's largest music retailing chain going into receivership is unfortunate, Sunrise Records saw the tremendous opportunity to swoop in. In fact, Doug Putman, President of the Toronto-based retailer, told the Canadian Press just that. "We think there needs to be a great outlet across Canada to buy music."
There's no denying that the sale of physical music products has been on the decline. Digital downloads and streaming have became the dominant form of music acquisition and listening, and have contributed to the demise of iconic Canadian retail outlets like Music World, a&b sound, and Sam the Record Man. HMV managed to skirt by until now, adjusting its strategy in attempt to appeal to new customer demands and trends.
But while one might question Putman's moves to expand in an area that is presumably being eaten alive by digital, it's interesting to note that Putman himself is a millennial. At just 32 years old, he knows a thing or two about his own demographic, and insists they still appreciate having something tangible. Although many industries, including music, have been shifting to digital, consumers have gotten a tad nostalgic, showing interest in gear like turntables and boomboxes, and media like records and cassette tapes. Perhaps it has a sense of distinction and nostalgia to it, in the same way one might feel using an antique coffee maker instead of a smart one, sending a letter in the mail instead of an e-mail, or tapping away at an old typewriter to gain inspiration.
Putman purchased the Sunrise chain in October 2014, when only five locations remained of the then 37-year-old retailer. There are now nine Sunrise Records stores in Ontario, located in cities outside of the main greater Toronto area (GTA), like Barrie, Brantford, North Bay, and Timmins.
Some of the old HMV Canada locations that Sunrise Records will be taking over include the 20,000 square-foot, two-level store in West Edmonton Mall that has a stage for performances, as well as stores in malls in Burnaby, BC, Winnipeg, Hamilton and Mississauga, ON, and Saint Bruno, QC. One store that isn't included thus far: the flagship HMV store at Yonge and Dundas streets in downtown Toronto.
Good news for former HMV employees: Putman says Sunrise is committed to hiring HMV employees, and encourages them to apply for the 700 positions that will become available.
As much as consumers are loving the throwback to physical media, sales will likely never reach pre-2000s levels. So how does an exclusive music retailer survive? Sunrise's strategy is to supplement the selection of physical music media with themed toys, board games, and music, film, and TV apparel. That seems strikingly similar to HMV Canada's strategy. If it didn't work for HMV, why might it work for Sunrise?
Sunrise does plan to carry more than 2,000 vinyl titles, giving it a fairly wide selection, and will sell music from local independent artists, which could be a pull from music fans who appreciate supporting local talent. "We want to support independent Canadian artists more than ever," says Putman. "We feel it's an obligation, not to mention we love discovering talented new artists."
It will be interesting to see how consumers react to the new Sunrise stores, and whether Sunrise can fill a hole in the music market that HMV, try as it might, just could not.