Singing The Blues At Record Stores

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Sunday, September 7, 2008

The record side of Olsson's Books and Records in Old Town Alexandria is still kicking -- barely -- but employees won't admit that trouble lurks. When I asked whether the store was in danger of closing, a cashier responded, "Nah, that was just the one store downtown. The rent was too high."

Meager stacks of CDs pushed far back against their shelves illustrated a different reality. The Washington area chain filed for Chapter 11 bankruptcy protection in July, just a month after it announced the closing of its Penn Quarter store. While rising rent was the final straw at that location, a series of problems -- rising property taxes, competition from the Internet and poor CD sales -- combined to exacerbate conditions for the struggling 36-year-old chain. Olsson's is "implementing a plan for successful restructuring" -- and it's not alone.

Record stores throughout the Washington area are folding or reinventing themselves to remain solvent in a market in which the "single" trumps the album and the Internet is king. In recent years, we've lost DCCD, Yesterday and Today, Revolution Records, Yoshitoshi and Tower Records to the same afflictions as Olsson's.

According to Almighty Music Marketing, approximately 1,400 independent record stores have closed since 2003, leaving 2,300 open nationwide and 25 open in the Washington region. In 2003, 16 independent record stores were open for business in the District; only nine remain.

Thirty-year-old Orpheus Music in Arlington is next on the chopping block. When the store's lease expired last March, the building broke with Richard Carlisle, Orpheus's owner, so that a higher-bidding bar could move in. "My business was doing all right until this whole lease thing happened," Carlisle said. But, he added, "You've got to be a niche store to survive anymore. It's got to be totally indie, or vinyl, or have some clothes."

Carlisle didn't leverage the Internet to bolster sales. Conversely, Bill Daly, owner of Crooked Beat in Adams Morgan, realized early on that he needed an Internet operation to maintain a lucrative business. Daly has been doing mail-order sales online since 1998. "Everything in the store is in the process of being listed," he said. "I have people hired who just come in and do stuff on eBay."

While the store has already eliminated two CD racks and plans to lose a third, Daly says he sometimes earns three times the market value for items he posts online. The Internet has also expanded his customer base. He has sold vinyl records through eBay to customers in Sweden, France, Canada, the Netherlands, Australia, California and Nevada.

Additionally, distributors penalize stores with re-stocking fees, sometimes costing owners as much as 25 percent of what they originally paid for new releases if items don't sell or are returned. The fees hamper profitability and dissuade owners from taking risks on lesser-known artists.

One bright spot in the D.C. record store scene is Red Onion Records and Books, which Joshua Harkavy opened a year ago on 18th Street NW. Harkavy's merchandise is almost exclusively used, and he has little interest in reinventing the way record shops have traditionally done business.

"It's just a sad state of affairs what the music industry has become," he said. "I've heard from people who do deal with new stuff how difficult distributors can be, how you're competing with places like Best Buy and Target. You'd have to invest tens of thousands of dollars in merchandise if you want to have a good collection."

-- Vinnie Rotondaro

Washington


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