Doug Putman's Brands Sold 10M Albums In Past Year
Doug Putman is too busy selling albums in the UK and Canada to waste his breath on myth makers spinning stories about the death of the CD and music retailing.
His Sunrise Records and HMV brands have conservatively sold 10-million albums in the past year and, in short order, he’s taken two moribund chains out of insolvency and breathed new life into them.
And, to boot, he’s expanding his brands on both continents.
Speaking late last week from his Canadian head-office in Ancaster, ON, the 35-year-old maverick music retailer had just returned from the UK launch of HMV’s online music store. The site is currently accepting pre-orders and selling a baseline of top con with the plan to go full-tilt by November 1, which is timely as the Christmas season is fast approaching when as much as 50-percent of annual sales are turned over.
A few weeks earlier, HMV UK made global headlines with the opening of its new brand, HMV Vault, that has taken over the 25K sq. ft. space formerly occupied by Toys R Us in the UK’s second-largest city of Birmingham.
Incredibly, Europe's largest music retail store is now stocked with 80,000 CDs, 25,000 LPs, and 60,000 Blu-ray and DVD films. HMV Vault is the size of two tennis courts set on a single floor with a café and a sound stage that has record companies jostling to get for their acts on.
It’s part of a rejuvenation of a classic brand that Putman pulled from receivership back in February, quickly renegotiating leases and ponying up payments to suppliers and salaried staffers at what now stands at 114 locations. Impressively, the iconic brand that began in the 1890s, with the birth of gramophone recordings, is pushing fast-forward with its smaller stores that under the previous ownership stocked a meagre 500 titles. Depending on size and location, those same stores now stock between 3,000 and 7,000 titles.
His inventory splits on average are 40/40 albums and film and 20-percent “everything else”. The everything else is an emporium of pop culture merch that runs the gamut from board games to casual wear to electronics and accessories.
In Canada, Sunrise Records has 84 stores nationwide that employ as many as 1,000 people. Mostly located in suburban, secondary and satellite markets, Putman is happy with the company’s annual sales and overall profit margin and remains reluctant to boost the brand’s stature by opening stores in major markets where rents are prohibitive. To this end, he’s closed a few stores in major-market shopping malls because the cost/return ratios made no sense.
He is candid in saying that his expectations for growth for both chains in 2020 are marginal, but investments in staff and systems are expected to yield no declines in the company’s profit margins.
Astonishingly, he says the entire cost of taking HMV UK out of receivership and rebuilding the chain’s inventory, as was the case in Canada, is self-financed by family funds. “We don’t borrow from anyone. We don’t have any hidden investors; we don’t have a bank (loan). I like to have the control to do what’s right for the business and not having to worry about what a bank thinks we should be doing.”
On Wednesday, FYI will continue the conversation with Putman as he discusses positioning his music retailing chains against external factors that include Amazon and music streaming sites.