[mplpost] Son(s) of Sam the Record Man: Back again!

[Richard Flohil]

On Friday, I sent a note about the situation at Sam the Record Man to 
the readers of MapleBlue, a Canadian blues list.  This morning, 
having just emerged from the corner coffee shop, where I hibernate 
for an hour and read the Globe and Mail, I thought I'd add to the 
piece I wrote.
	Anyone who's ever bought a CD in Toronto may care to read on!

The whole issue of where we buy records, and how, is certainly on 
many peoples' minds.  And in Toronto, the changes in policy at HMV 
(no discounts, no easy returns) have certainly had an airing - and, 
incidentally, the president of the company in Canada (and the US) was 
fired earlier this week.
	There has been little discussion of the going-on at Sam's. 
The daily papers were roundly scooped by the subway rag, which had a 
cheerful front page colour shot of Bobby and Jason, the Sons of Sam, 
snapped outside the store.
	The story announced that Bobby and Jason now own the store on 
Yonge St., and the one in Halifax.  Montreal and Vancouver stores 
were closed on Friday.  The once-mighty retailer, with more than 120 
stores at one time, is now down to two stores, plus a handful of 
others owned by companies/individuals who pay a royalty for the right 
to use a now somewhat discredited brand name.
	The boys have purchased the unsold stock from the bankruptcy 
trustees at 50 cents on the dollar. As preferred creditors in the 
bankruptcy, they have presumably been repaid the $2 million they 
claimed to have invested in the business (they originally claimed 
they were owned more than $7 million; this figure was reduced by the 
Superintendent of Bankruptcy).  The five major companies and all the 
independent distributors (who distribute most of the Canadian 
artists) will get some of their money back, but not their stock, 
what's left of which  now forms the backbone of what's in the "new" 
store.
	Not much, though, because the left-over stock (which came 
into Toronto from all the closed stores across the country) was sold 
off at 40 % off, and then 50% off, starting the week before Christmas 
and continuing as we speak. 
	This, of course, was designed to get rid of the stock, earn 
enough to pay off the Snidermans, and, at the same time, put the boot 
up the backside of the hated rivals HMV next door.

A LOOK INTO THE CRYSTAL BALL
	The "new" Sam's, the word has it, will be a "boutique" store, 
with lots of imports (none of the US and British suppliers of product 
were listed among the creditors in the bankruptcy; in other words, 
they were paid while the five Canadian major distributors and all the 
independent distributors were stiffed. 
	Don't espect much "service" at the "new" store - with more 
firings this week, the staff at Yonge Street is now down to less than 
20 people, compared with 35-40 in the palmy days.
	Sam's, in the future, will not be able to discount records as 
heavily as they have - because the major record companies and all the 
indepependent distributors, having been reamed in the bankruptcy, are 
going to be VERY careful as to what they sell to the new store, and 
on what terms, and at what price.  The new store will be unable to 
buy in the quantities they did when they ordered for dozens of 
outlets, which earned them massive price reductions.
	So why are the Snidermans holding on to Yonge Street, running 
what - even pared to the bone - cannot possibly be a profitable 
store?   The answer, of course, is "real estate."  (Some real estate 
expert - not me ! - will be able to guess what the Yonge Street 
property (owned by a different Sniderman company and not part of the 
bankruptcy), but it has to be MANY millions).
	The whole Yonge-Dundas area is being redeveloped (albeit more 
slowly than people had hoped, and the Snidermans will simply keep the 
store ticking over and wait.  After all, they have an inside track on 
what's going on: the word is that Bob Sniderman is a member of the 
city-appointed committee that's overseeing how the area is going to 
be redeveloped.
	Music business insiders figure this one's been in the works 
for a long time.  In hindsight, they remember that Bobby turned up - 
after 20 years away from the record retailing business running his 
Senator restaurant/jazz club - at an industry golf tournament last 
summer; was he planning to re-establish contact with industry movers 
and shakers?
	The Globe's piece this morning - by the reliable arts 
reporter James Adams - is headlined "Music Is sweet again at Sam's." 
"Everybody's upbeat,"  Bob Sniderman is quoted as saying.  These are 
two assertions that will hardly resonate at the companies who have 
been stiffed for millions of dollars (as have the artists whose music 
was distributed by the companies).
	There are lots of implications for record buyers in Toronto. 
First of all, prices at the new Sam's will be much higher.  Secondly, 
once Sam's' "empty the store" sales is over, HMV will be able to 
offer cheaper prices than Sam's, but prices WILL increase 
considerably (and HMV has already got rid of the perks it gave to its 
customers).  There will be less and less space for independent music, 
less and less pace for back catalogue music for the true fan.
	You won't see price competition on Yonge Street (which was 
one of the cheapest places in the world to buy records).  HMV is 
going to make more money, and prices will continue to go UP.  But 
Virgin is coming to the new development at Yonge and Dundas, in a 
couple of years - or five at the longest, depending on how our 
current "recession" plays out -  and there will be a flurry of 
competitive prices then.
	That's when the "new" Sam's will sell its real estate, and 
all we'll have will be memories of what was, once, the best record 
store in the world.
	Music is "sweer again"?  I wish I could believe that!

Sadly,

Richard

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