Slipped discs

Are Virgin and Tower really the enemy, or can the indie stores fight back?

Tucked away on the ground floor of a three-story shopping complex on the corner of Greenville and Mockingbird, CD World is the kind of record store you can't leave empty-handed even if you want to. There's always buried treasure to be found hiding in the racks, like an undiscovered Rolling Stones live set or an, ah, import of unreleased studio recordings by Stevie Ray Vaughan. Its well-organized racks teem with imports, rarities, and used discs chosen with a fetishist's eye for detail. A visit to the store, one of this town's last old-time independent record shops, is like combing through someone's personal record collection. An entire wall is devoted to new releases, from The Afghan Whigs' 1965 to Jad Fair and Yo La Tengo's Strange But True, adjacent to a row of bins crammed with most every local CD released in the last 10 years. The opposite side of the cramped store features an unrivaled assortment of techno and punk records, and more show tunes than a week on Broadway.

Yet as good as it is, CD World is a relic of the past. Back in the day, Dallas used to be full of stores like CD World, record shops staffed by real music fans who would sell you what you wanted and what you didn't know you needed. But they have all succumbed in recent years to chains that use cheap CDs in order to lure customers to the stereo and washing-machine departments; they've fallen victim to stores that dazzle with breadth of selection at the expense of personal service. Neal Caldwell's VVV Records, Metamorphosis and Direct Hit Records, 14 Records, and Last Beat Records have all shut down in recent years; they have been chained up.

Only a few stalwarts remain: Bill's Records, R.P.M., CD Source, Pagan Rhythms, Oak Lawn Records, and Collectors Records, among them. But for better or worse, the future of music retail lies in corporate giants such as Virgin Megastore (which launched its first Texas outpost in Grapevine Mills a little more than a year ago) and Tower Records, whose Lemmon Avenue store opened December 15.

And that is only the beginning.
Rumors swirl of another Virgin Megastore opening up on Greenville and Mockingbird in the near future; indie-store owners have heard that the chain is supposed to go in near the old Dr Pepper plant. And new Tower locations in Dallas and Fort Worth are already in the planning stages.

Yet Tower's chief operating officer, Stan Goman, based in the company's Sacramento headquarters, doesn't see his store as a threat to independent music retailers. Rather, he says Tower is on the same side as stores such as CD World and Bill's, nothing more than a Mom-and-Pop outfit--albeit one with more than 200 locations worldwide to serve you. In his eyes, Tower is an independent store too, an ally in the fight against cold corporations like Virgin.

"They're Darth Vader," laughs Goman, who started at Tower as a 19-year-old rack jobber in 1967. "They're not good either. That's the funny thing. They have these big spaces designed by some Italian designer. They're not warm. We're two different companies. They're a public company. They're slick. We're much better. We have the goods. We have the records. And it's done locally. We buy locally. We don't centrally buy. That's what makes us unique. We let the kids in the store stock the store. While some companies try to micromanage inventories out of a central office God knows where, we let the kids micromanage. We pride ourselves on each one of our stores looking totally different."

Despite Goman's cheerleading, the only real difference between Virgin and Tower is that Tower moves into existing locations--the store on Lemmon Avenue was formerly Trucker's restaurant--while Virgin prefers to build its own stores. Both chains have comparable selections (hit and miss) and prices (from the reasonable to the offensively exorbitant). And both aren't really record stores anyway: CDs fight for space with books, magazines, videos, laser discs, DVDs, and--at least at Virgin--a coffee shop. They're record stores-cum-theme parks--shinier, happier versions of their independent counterparts. But because of their size and advertising budgets, Virgin and Tower are able to attract a wider variety of customers. A casual music fan is much more likely to shop at one of the chains than at one of the smaller stores.

Surprisingly, even though the threat of extinction is more immediate than ever for stores like CD World, they're not as concerned as you might think. Bill Wisener, owner of Bill's Records, recently re-upped his lease for three more years, and claims to have had his best Christmas in 17 years in the business.

And Pagan Rhythms owner Lavon Pagan--who first started selling records out of the trunk of his car in 1975--believes his store will actually get a boost if Virgin moves in down the street. After all, when Pagan opened his store on Greenville Avenue almost a decade ago, he did so next to one of the top-grossing Sound Warehouses in the country. "Any place that's putting out a lot of CDs is a great place for me to have one of my stores," he says. "[It's] a big boon to be close to anything that drives people into the area."

Pagan refutes a December 5 story in The Dallas Morning News that reported he had sold his store to the Cleveland-based Record Exchange chain, which currently owns 17 stores. Rather, Pagan says, he and Record Exchange (which has a store in Austin) have merely partnered up in the CD wars; you can never have too many allies. As such, Pagan insists that a small, efficient business such as his--which buys directly from the labels instead of the distributors that supply both chain stores and independents--has nothing to fear from a "lumbering giant" such as Tower. After all, he has been in business for years next to a Sound Warehouse, which became a Blockbuster Music...which is soon to become a Wherehouse.

Indeed, it's more than a little ironic that even as the local indies encourage competition from bigger stores, at least one chain has given up the fight. Blockbuster Music, which replaced all the existing Sound Warehouses in town, will no longer exist in a few weeks. On August 11, 1998, the New York-based Viacom Inc. announced that it had sold its 378 Blockbuster Music stores to Wherehouse Entertainment for $115 million--mere pocket change, even though Viacom insisted its music stores generated $590 million in revenue in 1997.

Sumner Redstone, the chairman and CEO of Viacom Inc., insisted last summer that the transaction was "another step in Blockbuster's revitalization" that would allow the company to "focus on what it does best." In short, the video-rental giant was glad to be rid of the music arm of its business. It had long been rumored that Blockbuster's Dallas stores were hemorrhaging money--to the delight of the smaller stores around it.

"Personally, [the chains] don't worry me, because I know our client base are people that regularly shop for music," says Bill Stafford, an employee at CD World--which is just down the street from the Greenville Avenue Blockbuster Music. "Music's an important part of their life. Here, they can get a good deal, and we do special orders, and they appreciate the fact that most of the people who work here are into music and know what they're talking about. They know we can get the obscure import CD with that B-side they're looking for.

"It's the difference between going to Tom Thumb and your corner butcher. You can tell the corner butcher, 'I'm serving six people tonight and need this much meat,' and he can cut it for you. At Tom Thumb, the meat's pre-cut, and you pick it and eat it. We specialize in being decent. We treat people well and get them what they want. You go to Tower or Virgin, and the person checking you out is some high school kid making minimum wage or someone doing it as though they're selling product."

Almost to a man, the owners of the local independent stores talk about the chaining of their neighborhoods with a certain degree of defiance and glee. It's as though they welcome the fight, even though every newspaper in every city in the country is crammed full of obituaries mourning the loss of some beloved indie store stomped to death by Tower, Virgin, Best Buy, Borders, or HMV and other chains yet to rear their heads in Dallas.

When Tower went into Denver in 1995, at least one smaller store was forced to close its doors, and since then, two more venerable indie outlets (including one that had been around for almost 20 years) have gone out of business. But that did not stop Virgin from opening one of its megastores in downtown Denver the week before Christmas last year.

"A lot of indies have been going out of business here," says Garth Geisler, a manager at Denver's Twist & Shout, a new-and-used store that found it necessary to expand in 1995 to compete with the chains. "When Tower opened a mile away, we kinda felt them the first few months, and when Virgin opened, like, for a week we felt them. But since then, we've been doing fine. We dipped a little at first, but they're definitely overpriced, and our staff is a lot more knowledgeable about music than your average employee at Tower or Virgin."

A thousand miles away--at the CD Warehouse on Oak Lawn, to be exact--store manager Jim Antich almost word for word repeats Garth Geisler's nonchalant mantra: The chains are a novelty, and novelties wear off. "People come in and ask, 'Where's the Tower?' We tell them they're right around the corner," Antich says. "But they come back five minutes later and say, 'You're right, they're expensive.' So, if anything, it's going to help. It's just going to bring more people here and put more product out there for us to buy."

Ten years ago, it was much simpler to discount the threat of a major chain moving into the area. Independent record stores had independent records, and chain stores didn't. But music retail isn't as black-and-white as it once was. Chain stores don't exclusively stock only major-label releases anymore; you're as likely to find a Guided By Voices record at Best Buy as you are at Bill's. And Borders carries almost as many indie-rock CDs as anywhere else, from early Pussy Galore on Matador to records on Merge and Drag City; it even stocks a few obscure import titles.

And most of the chains, including Tower and Virgin, do employ local buyers so they can stay on top of current trends. Even though the independent stores still cover the gaps better, the chains are gaining. Now that the playing field has been leveled in some respects, it may be more difficult for independent stores to keep from being leveled along with it. If anything, say the indie buyers, the strides chains have made in terms of stock selection have only made independent stores try harder.

"One thing I've noticed is we tend to emphasize more indie and imports," says CD World's Bill Stafford. "To a degree, the chains do affect us in that we have made a conscious decision not to be a faceless, bland supermarket chain. But part of that is who works here. [Owner Mike Schoder] is not a supermarket guy. He is more than happy to let you add something if you tell him it's good and can sell, which is not the option at other places. Here we're able to pursue the indie niche that Virgin or Tower or Blockbuster can't."

Not only that, but independent stores can adapt to trends on the fly better than Tower or Virgin, whose local buyers are, for the most part, still bound to the selections available from their in-town and out-of-town distributors. If there is a demand for a certain record, the smaller stores can add it to their catalog much more simply than one of the chains, turning around orders in a matter of days instead of weeks. (Indeed, Virgin's Grapevine Mills location isn't even accepting special orders until February.) The smaller stores can gamble and take chances without getting the go-ahead from anyone at the corporate office.

"The people who work here listen to music and know what's out, and we know once people hear it they want it," Stafford says. "A couple of years ago, a guy who worked here bought a promo copy of Exit Planet Dust by the Chemical Brothers, and he listened to it and said, 'It's killer! I can sell it,' and every time someone came in and said, 'I'm looking for something new and funky,' we put it in their hands. I can't tell you how many hundreds we sold. And we added it not because anybody wanted it, but because someone heard it here and knew it would move."

Independent stores also have an ace in the hole that Virgin and Tower can't compete with: used CDs.

One look at the chart that accompanies this story reveals that for all their ability to order in mass quantities, the chain stores still sell their discs at exorbitant prices. So why does R.E.M.'s new album Up cost $13.91 at CD World, but at Tower it runs you $17.99? Because CD World can offset the paltry one-dollar profit it makes off of a new CD with the three or four bucks it gets from the sale of used discs. At Virgin or Tower, the higher markup ($3-$5) is necessary to stay afloat. In a way, CD World's price strategy is kind of the reverse of Best Buy's loss-leader tactics, getting people into the store so they'll buy several cheaper items instead of a single large one.

"If Best Buy is selling R.E.M. for $11.99 and we're selling it for $13.91, they're selling it for what they were charged for it," Stafford says. "They're a monolithic corporation, and they can cut all sorts of back-room deals and can also charge you $1,500 for a refrigerator that costs them $600. Honestly, most used-CD stores like us sell new releases at a low margin to entice you to buy used stuff, because we make more money on used CDs. We don't hide that fact. But we still get people a good deal."

Still, these days, the Internet may be the best record store around. A week ago, the Dallas Observer received a missive from Anthony Wilson, an Abilene resident who disapproved of several of the picks on our list of the best albums of 1998 ("Listen Up," December 24), including Jets to Brazil's Orange Rhyming Dictionary, Rufus Wainwright's self-titled debut, and Neutral Milk Hotel's In the Aeroplane Over the Sea. He insisted that "these are performers [that] most of your readers, particularly those who live in cultural meccas such as Abilene, will never have the opportunity to hear or purchase." But even people who live in Abilene have access to the Internet, as Wilson--who found the story on our Web site, then complained about it via e-mail--so ably pointed out.

All of the albums on our year-end lists are available through CDNow (cdnow.com) or Music Boulevard (musicblvd.com), and both sites have downloadable sound clips (in Real Audio format) as well. People used to drive from Oklahoma to catch the new wave at VVV Records, but with the advent of the Internet, there's no need for anyone to do that anymore. Of course, the cheap prices aren't so cheap once you factor in shipping and handling, and it takes a few days to receive your order, but basically every record you want or need is a point and click away.

No store is safe anymore.

Additional research provided by Jessica Parker.

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