THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, August 3, 1995 TAG: 9508030522
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 77 lines
Don Rosenberg envisioned Hampton Roads residents flocking to his three music stores, buying new and used records, tapes and compact discs. His small chain would be offbeat, offering works by local artists in a homey atmosphere.
That was three years ago, when he estimated he would expand to as many as nine stores in this region. Had he known about the gargantuan music outlet soon to barge into this area, Rosenberg might have passed.
``When you look at Planet Music and the music industry in general, the chances of us being able to open (an additional) five or six profitable stores in the market were nil,'' said Rosenburg, president of The Record Exchange, based in Charlotte. ``Once you know you can't win, you get out as quickly as possible and go where you can win.''
So, he did.
The 12-store chain closed its three Hampton Roads stores: in the Wards Corner community of Norfolk, next to Lynnhaven Mall in Virginia Beach and in Hampton.
The Record Exchange says its departure is partly because of competition from superstores like Planet Music and big chains like Blockbuster. The giants of the industry have more buying power and are able to deeply discount merchandise.
Small music retailers also are finding new competition from discount and electronics stores, who are selling popular CDs and tapes at lower prices.
``They're not running on the same rules,'' Rosenberg said. ``They're not trying to make a profit off their CDs. They're using them as a door prize.''
Rosenberg isn't blaming the big guys for all of his problems. He said The Record Exchange never managed to scream loud enough, ``Hey, we're here!'' to its potential customers in Hampton Roads.
``I wouldn't want to come into the market now,'' said Barry Friedman, manager and co-owner of Birdland Music of Virginia Beach. ``It would be impossible.''
Friedman, who shares ownership of the company with his father, Thomas, acknowledges that the competition is getting tougher. But he says he's fortunate to have an established clientele after more than a quarter century of operating in Hampton Roads.
Still, Friedman remembers when Planet Music opened in late 1993 with more than 100,000 compact disc titles. At 32,500 square feet, the gargantuan outlet off Virginia Beach Boulevard was more than six times the size of the typical record store.
Friedman said some of his customers might have tested Planet Music. But it doesn't seem to bother him.
``I'll make the analogy with restaurants,'' he said. ``When a new one opens, everyone flocks to it. Then, after a year, they come back to where it's comfortable and convenient.''
Joe Randall agrees. A frequent shopper at The Record Exchange, he scurried over to Planet Music when it opened so he could browse through the massive selections. While he still shops at the large outlet, he finds himself wandering back to small music stores.
``The only thing I like about Planet Music is the computer, where you can check through all the titles,'' said Randall, as he walked through the Volume CD store that replaced The Record Exchange in Virginia Beach. ``I like the small stores. They're more homey.'' ILLUSTRATION: Color photos
MOTOYA NAKAMURA/Staff
The Record Exchange has closed all three of its stores in the area.
D. KEVIN ELLIOTT/Staff
CHARLIE MEADS/Staff
Giants of the music industry such as Planet Music and Blockbuster
Music have more buying power and are able to deeply discount
merchandise.
by CNB