Is There A Future For Music Retail? Pt 1

Has the ongoing Rocking Horse saga sent nervy ripples through Australia’s music retail industry? Following the Brisbane record store’s near closure, MATT SHEA polled a bunch of indie music stores from around the country to see how they’re travelling and to find out whether there’s a future in music retail. Main photo by LEAH ROBERTSON.

[Historical image is withheld pending rights review.]

It’s been an anxious month for our indie music retail industry. After an announcement in late June that Rocking Horse – Brisbane’s biggest independent record store – might have to close, an eager public flooded through the doors, snapping up sales items and rare merchandise in a last ditch effort to keep it afloat. Two weeks ago it looked like all had been in vain when Rocking Horse owner Warwick Vere confirmed he’d be pulling up stumps, but an 11th hour reprieve has allowed them to keep the doors open for the “foreseeable future” at least.

Meanwhile in Melbourne, rumours began swirling around the fate of Missing Link, one of that city’s most iconic record stores. The CBD institution had been put on the market in March, but the departure of a long-time staff member fuelled speculation the store would be closing as soon as this month. (Owner Nigel Rennard later confirmed via statement the store had no plans of closing “anytime soon”.)

While both Rocking Horse and Missing Link have lived on to fight another day, the former’s stay of execution, in particular, has sent nervy shockwaves through an industry already battling the digital onslaught, cashed-up major chains, a high dollar and a sluggish economy in recent years. But the majority of retailers polled by M+N remain cautiously optimistic. Most believe the surge in vinyl, not to mention their passion for music and their unique approach to customer service, will ensure their survival.

Collectors Corner and Missing Link (Nick)

CBD, Melbourne

[Historical image is withheld pending rights review.] It’s great that Rocking Horse are staying open. I don’t know too much about the situation but if they’re open, that’s good. Retail is tough all over – especially music – although any number of issues can arise these days that'll sink the ship. Collectors Corner were able to move on from a similar situation last year, and luckily we were able to get into new cheaper premises with Missing Link and hit the ground running.

Initially we’ve run as two separate businesses since we kicked off in October last year. We basically had to see if it worked and how compatible it was. We’ve been running parallel systems and it’s just gotten to the point now where things do work. With us taking on the Missing Link admin it frees us up and gives me more control over what we have coming in and make sure we’re not doubling up at all. We’re just basically streamlining the whole effort and implementing systems that Missing Link perhaps lacked.

Our store’s performance is all over the place so I doubt we're that locked into general retail patterns. We pick up with obvious retail peaks, but we also do well out of touring festivals and that sort of thing. If we get in a large import shipment or second hand buy we can have a booming couple of weeks simply through word of mouth – that’s the advantage of stocking an ever-changing range of desirable products.

For us, vinyl’s the biggest format now by far. CD had been our biggest right up until we moved store and DVD was well up there, though the trend was clear: the more vinyl we had the more we sold, and coupled with the impending reduction in general foot traffic – street level Swanston Street to a Bourke Street basement – we’d already made the decision to make vinyl the priority because it’s more of a destination focused product.

Vinyl’s the biggest format now by far.

There’s a whole range of things that we hold as an advantage over the major stores. Personalised service, staff knowing the regulars and being able to recommend specific titles, discounts for regulars and large purchases, and generally being able to look after people a little better. We can focus on genres that are neglected by chains, and track down hard-to-find and second hand items when possible. We're not locked in to campaign based spending, hitting minimum order targets, over-buying for the best discount or any industry bullshit. We’re more interested in getting in what we think is cool and gaining greater satisfaction from passing it on to the customers.

The Rocking Horse survival I guess does give you some encouragement when it comes to the state of the industry. But there’s a lot of people who don’t actually work in record stores running around lamenting the glory days when really there’s a lot of people out there still buying records, if you’ve got them. So long as you can keep it interesting and keep it fresh, either with new or second hand stock, I can’t see how you can go wrong.

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Record Collectors Corner and Missing Link are located at 405 Bourke Street, Melbourne. A second Record Collectors Corner store is located at Curtin House, Level 3, 252 Swanston Street, Melbourne.

Kill The Music (Paul)

CBD, Brisbane

[Historical image is withheld pending rights review.] I know people who have worked at Rocking Horse and they’ve said that they’ve had to think about moving. I wasn’t surprised when I heard they were closing, but hell yeah – the fact that they’re going to be around for a little longer is great news. Brisbane city is getting so fucking boring and stale that there are no really cool stores left, so this is definitely a good thing.

The whole episode has made me think about being in this market, for sure. In the last couple of weeks I’ve had huge realisations. With the Rocking Horse thing – I can’t explain what it was but something made me go, “Okay. We need to step our game up.” I think roughly in my head, this financial year just past was probably a little bit better than our first year but worse than the previous year and the year before that. But I don’t owe millions of dollars or anything like that.

Rocking Horse are so big so it’s got to be hard to keep up with all the different genres. It’s very rare that I’ll order something from a major, but the new Manchester Orchestra: I’ll order 20 copies and with a discount it might cost me $17. I got it and I put it out and then somebody says that they’ve just been to JB and they’ve got it for $15! Imagine with Rocking Horse having to do that with a whole range of bands.

“The most important part of having an indie store is interaction.

Rent is our biggest thing; they don’t make it easy in Brisbane. Parking in the city is $60 a day. The council close off streets for parades for football players, but they won’t talk to small business and ask, “How can we make this work?” They don’t give a fuck.

But the most important part of having an indie store is interaction. I just try to get that relationship going. I know how to treat my customers, but it’s just a matter of knowing your clientele, I guess. I have hope in myself and what I do, but the music industry can't get much worse, so if we can hand around long enough we'll have enough loyal customers to keep us going, and that's all I can really hope for.

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Kill the Music is located at 161 Elizabeth St, Brisbane.

Off The Hip (Mickster)

CBD, Melbourne

[Historical image is withheld pending rights review.]

The Rocking Horse survival is great news for Brisbane. It’s a sad fact that record stores are closing all over the world, but Rocking Horse’s closure would have surprised me as they’re the last big indie store in Brisbane city trading in new and secondhand CDs, vinyl and DVDs. I've never looked at Brisbane rents to see how they compare to other capital cities, but I reckon there's not such a need for indie record store to have high visibility – and therefore high rent – on Main Street. A chunk of business has gone online, so there's no point paying high rents for that.

Their recent struggles don’t really make us think twice about our own business. Off The Hip is more than just a record store: we're a record label first and foremost with over 100 albums released to date. We also export not only Off The Hip titles, but other like-minded Australian labels into Europe. We license music to TV and film regularly, and we offer a manufacturing service for small labels and bands. We didn't begin Off The Hip with a loan of any sort, so we're always on top of finances. And my passion for music, including new and young bands, is as strong as ever.

My passion for music is as strong as ever.

The knowledge of the indie record staff is the big advantage for us over the majors – it borders on geekdom. The chains are just “scan-and-go”. Ask the clerk at the chain about production values on a particular record and laugh at the utter bewilderment on their face. A keen sense of secondhand vinyl is really important for indie record stores too. In the record store these days we sell mainly vinyl – about 75 per cent of all sales are vinyl.

Chris Gill at Northside Records put together the Diggin' Melbourne map, and that’s such a great resource for vinyl lovers. It lists over 50 indie stores with a vinyl focus in Melbourne alone. I reckon things are OK in this city at the moment. As far as Brisbane goes, even if Rocking Horse closed I'm sure two or three smaller – maybe one-person – shops would open in its place; like what happened in Adelaide when Big Star closed.

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Off The Hip is located at Basement, Tavistock House, 381 Flinders Lane, Melbourne.

78 Records (Andrew)

CBD, Perth

[Historical image is withheld pending rights review.] I was a little surprised when I heard that Rocking Horse was closing – they’re the leading independent record store in Brisbane. They’re very similar to us in a lot of ways. But the news that they’re staying open is very positive. Obviously everybody’s been supportive of the fact that they were just about to close, and the people have spoken. Warwick believes in it, and it’s an iconic store. It’s great news.

Things for us are travelling OK; our heads are above the waterline. But it hasn’t been easy. We tried to be everything to everyone for a long time, but we’ve gone back to basics, cutting out all the commercial stuff and concentrating on the indie side of things. We just thought that we’d do what we know we can do and do really well. If you want your Justin Bieber CD you can go to JB Hi-Fi and buy it.

About a year ago vinyl would have been about four percent of the total sales, but I reckon now it’s up to about seven to eight percent. That’s a big jump. We still sell a shitload of CDs, but the great thing is that there are a lot of younger people pulling out their turntables and getting galvanised by the concept of records. Now you have the little coupon where you can download the digital version of what you bought. Companies are taking this really, really seriously and I think it’s fantastic.

I know the comparative strength of West Australian economy has been in the news, but retail has been struggling over here too. For music stores, there’s always the thing about downloading: certainly that’s helped kill this industry off in one respect, but on the other hand there are people who are interested in music and finding things on the net, there’s always going to be a certain person who comes in and buys the physical product.

If you want your Justin Bieber CD you can go to JB Hi-Fi and buy it.

In terms or running an indie store in 2011, I think you’ve got to have that knowledge of the product you are stocking, and definitely if you’re an indie store. You’ve got to have knowledgeable staff and the right product. You’ve got to have a good atmosphere in the store, be inviting and welcoming, and talk the talk with people. 78 Records is 40 years old this year, and we just keep striving to be the best we can and to be.

The news about both Rocking Horse and Missing link is very positive. They were two worrying signs about the industry that have now turned into positive stories. They’re going to have their tough times still – we all are – but I’m anticipating that the really tough period is over. I’d hope so anyway.

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78 Records is located at 914 Hay St, Perth.

Red Eye Records (Chris)

CBD, Sydney

[Historical image is withheld pending rights review.] It’s great news about Rocking Horse surviving. Warwick is soldiering on. He’s a fighter, so good luck to him. I hope it works long term, but we’ll see. We’ve been good friends since he opened the store and we talk a lot, so I knew the difficulties he’d had in the last couple of years. It almost looked like everything got stacked up against him in the end.

What Warwick said [in his July 1 interview with Mess+Noise] is true. The rents are higher in Brisbane compared to Sydney. In Sydney: as you know we’ve just moved after our old rent had crept up, but it was interesting what we found when we looked round town. There were quite a few places that had much more reasonable rent than what we were paying. I think we ended up with the best store we’ve ever been in with this new York Street store.

But I’ve got to be honest about it: we’re reflecting the whole industry and we’re going through a tough time. Still, with hard work and loyal clientele and great staff we’ve managed to keep everything on an even keel, and we have a good business plan for the next nine or 10 years. The dollar’s had a big impact on our export web sales, but our domestic web sales are still quite strong. It’s very nice to come in every morning and have plenty of orders that we can fill straight away. Vinyl’s definitely the growth area of the store. We’re concentrating a lot on it and with this move we’ve got room to expand our vinyl component. I would predict that it could become 50 percent of our business quite easily over the next few years.

The difference between the major retailers and us is like chalk and cheese.

For the punter the difference between the major retailers and us is like chalk and cheese. You come to an independent store, you’re actually talking to the people who own it and run it and actually care about music. That’s very different to the big mass marketers – they care about turnover and margin – the content, or the music, to them is basically irrelevant.

It’s quite a critical time for most music shops. The news about Rocking Horse and Missing Link both continuing to trade gives you a little bit of hope. It’s good to see that there are people willing to give it a go, even in such adverse circumstances. I think it’s a positive thing for the industry and for the customers who want to go to their favourite local shop as well.

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Red Eye Records is located at 143 York Street, Sydney, and 370 Pitt Street, Sydney.

TOMORROW, PART 2: More record store reactions to Rocking Horse’s near closure and their speculation on the future.