
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, May 17, 1994                   TAG: 9405170111
SECTION: BUSINESS                    PAGE: C-8   EDITION: METRO 
SOURCE: By CAMERON HUDDLESTON STAFF WRITER
DATELINE:                                 LENGTH: Medium

USED-RECORD IDEA IS SPUN INTO PROFIT-TURNING COMPANY

Roanoke native Don Rosenberg had just graduated from the University of Virginia. With time on his hands and a little money in the bank, he opened a used-record store as a summer experiment.

Rosenberg bought about 800 records from flea markets and garage sales and set up shop in the basement of a Baskin-Robbins ice cream store on Brambleton Avenue. That was 15 years ago.

What began as a modest business venture where records were displayed in homemade bins has grown to what's now a 15-store chain, known as the Record Exchange.

``I figured if I failed, I'd have records left over and that would be the end of it,'' Rosenberg said. Within three months, though, his first store began to show a profit. Soon, his customers began asking for new music releases, so the Record Exchange started selling new records at discount prices in addition to the used records that were the original stock.

As the Record Exchange prepares to celebrate its 15th anniversary on Saturday, Rosenberg reflected on his unanticipated success in the record business, which has since become the compact disc business. Rosenberg attributes it to his willingness to accept advice or criticism.

``I knew that I didn't know what I was doing, so I was very willing to listen,'' he said.

One year after the Roanoke store opened, Rosenberg began looking for a larger city with an active music scene as the site for another outlet. He branched out to Greensboro, N.C. Then he opened stores - one a year - across North Carolina and Virginia: Winston-Salem, Charlotte, Lynchburg, Blacksburg, Raleigh, Fayetteville, Salem, Norfolk, Virginia Beach, Hampton and Chapel Hill. Rosenberg would not release private company's earnings, but he said he has seen a steady increase in sales. The Record Exchange has been listed among North Carolina's 50 fastest growing companies in the past five years, he said. The company now is based in Charlotte, where Rosenberg lives.

Due to the success of the stores, Rosenberg was able to relocate five of them from ``hole-in-the-wall'' locations to shopping centers. The Roanoke store last week moved to Cave Spring Corners from its 2825 Brambleton Ave. location.

Customers won't see many of the items that gave the Record Exchange its start. Records are no longer the big sellers in Rosenberg's stores, although they are still available.

Used CDs now draw customers. Along with lawsuits.

Last year, four CD distributors withheld advertising allowances and promotional material for four months from several music retailers, including the Record Exchange, because they were selling used CDs.

The retailers were able to reach a settlement out of court with the distributors. Rosenberg said the distributors will reimburse the retailers over the next year by increasing advertising allowances.

Despite his conflict with CD distributors, he said he will continue to make every effort to sell music at discount prices.

by CNB