Music Zone
From Wikipedia, the free encyclopedia
Music Zone is a music retailer in the United Kingdom. There are 58 branches of the company, which was formed in Levenshulme in 1984. It has gained a reputation for being one of the cheapest music stores on the High Street, often matching the low prices of CDs that can be found in supermarkets. It was also known for selling DVDs, Video cassettes and Books.
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[edit] History
[edit] Early history
The first store was a market stall run by Russ Grainger in Longsight. He was soon able to buy a permanent shop, located next to the Stolen From Ivor clothes shop, near the Tandy store in Stockport. Even though the store was small and with competitors ranging from similar operators like Music Junction and Double 4 Records or majors like HMV, Our Price and Virgin, the firm managed to hold its own in the Stockport marketplace and soon after opened various branches in the Manchester region (taking on retailers such as Omega Music in Wigan).
[edit] Expansion
With local competitors such as Music Junction and Omega Music closing their branches, Music Zone started on a major expansion plan which saw it re-brand itself as a value led retailer called Music Zone Trade Direct. From the old Stockport store, the firm moved a few stores up the street to take over the top levels of the old Toy And Hobby shop (the ground floor is let to a shoe shop) which had been empty for a number of years. From this base the firm saw through its expansion plan which featured a value led emphasis on back catalogue, stock merchandising/racking based on price-points, the abolishment of singles (though this measure was reversed in the 2000s) and a store design that featured a number of "nick-nacks" such as gobstopper machines.
The low prices of the DVDs and books proved popular, and by 2004 it had 55 stores nationwide. These were largely confined to Northern England, however.
In Spring 2005 founder and Chairman Russ Grainger sold the company for £12 million to a team led by the then Managing Director, Steve Oliver. This management buyout was backed by a loan and credit facility supplied by the Bank of Ireland and a new board of directors was put in place which included Retail Director Nick Standing from failed retailer Our Price and a new Commercial/Marketing Director, Eren Ozagir. Oliver, Standing and Ozagir's changes included an emphasis on selling store-space and promotions to studios such as Universal, Warner Brothers and Twentieth Century Fox. These promotions included the selling of chart positions, preferential "best-seller" and new release racking, "CD/DVD of the Week" highlighting and coverage on a new weekly CD played 4 times a day in-store (which quickly became notorious for the announcer's constant embarrassing errors and mis-pronunciations). The product range was widened to include many new lines and items including pornographic DVDs and children's sweets were introduced.
In July 2005, the only London branch, located in Oxford Circus, closed down despite having a high customer base.
In late 2005 the company bought 41 outlets from collapsed chain MVC. This allowed it to spread nationwide, with its purchased stores trading as 'Music Zone' from 2006. The MVC acquisitions took the ever-expanding Music Zone estate over the commercially important 100 mark and renewed the presence in London. The chain was, briefly, the third largest specialist CD and DVD stockist in Britain, less than 30 stores behind nearest rival Virgin Megastore. A new warehouse was acquired in the Denton area of Manchester and Nick Standing introduced an ambitious new system to refocus the depth of the product range wherein stores' stock of back catalogue lines was reduced to one copy each only. The new system was fraught with errors and glitches as was the attempt to assimilate the MVC structure into Music Zone. The Denton warehouse was also a considerable drain on the company's resources.
[edit] Collapse
Business had been slow throughout 2006 with many stores trading at more than 30% below the week-on-week figures for the previous year. Christmas 2006 showed a mild relative improvement but with profit warnings issued by both Woolworths and HMV and with the collapses of two major home entertainment retailers earlier in the year (MVC and Silver Screen), confidence in the market was weak. Without warning to Music Zone, on December 27th 2006 the Bank of Ireland withdrew its loan and a search by the management team for alternative backing was to no avail. Then, on January 3, 2007, the company went into administration, [1] with 31 stores across the UK closing two weeks later.[2]
On January 25, 2007, all stores ceased trading; the Head Office closed on 30 January 2007, and the company ceased trading altogether with debts of ₤31 million.
[edit] Future
On 5 February, rival retailer Fopp announced it would be taking over 67 of the remaining stores as well as some of Music Zone's Stockport head office and Denton warehouse facilities. [3]. The website has also restarted trading.
On 1st March 2007 Fopp closed 9 of its newly acquired Music Zone stores, bringing the total to 58 stores. This latest group of closures included the once-thriving Trafford Centre store, which had been an "A-grade" flagship store for Music Zone until being hit by the decline in consumer popularity of the Trafford Centre shopping centre and the centre's upwards-only rent policy which has seen an increasing number of shop units becoming - and remaining - empty. Also included in the closures were stores in Hanley and Chester. Current plans are for some stores to be converted to the more upmarket Fopp design and some to remain as Music Zone stores. The Music Zone stores will continue trading under the same name, but will change in many ways, such as switching over to Fopp's "round-pound" pricing structure (replacing Music Zone's supermarket-aping "...97p" prices) and more generous refund policy. Industry watchers continue to doubt the viability of the high street market.
