'Unprofitable' Wherehouse Music set to close in April

|tab|

Wherehouse Music Outlet in Springfield will close at the end of April. Anita Marie Hill, spokesperson for Wherehouse Entertain-ment Inc., said closure of the store was first announced Feb. 21, one month after the company filed for Chapter 11 bankruptcy protection.|ret||ret||tab|

Hill said the Springfield store at 3040 S. Glenstone Ave. is closing because it is unprofitable; however, she declined to disclose any financial figures for the local store. |ret||ret||tab|

Manager Ben Jones said 11 people are employed at the Springfield location.|ret||ret||tab|

The store opened as Blockbuster Music in April 1994. Wherehouse Music purchased the store in October 1998. When the 30-year-old company first announced plans for reorganization, 30 stores had already closed and 120 unprofitable stores were expected to close. Hill said a total of 190 stores are now set to close, including four in the St. Louis area, leaving 176 locations open. |ret||ret||tab|

"After careful evaluation of various restructuring and recapitalization alternatives, we concluded that a voluntary reorganization under Chapter 11 presents the most effective means to restructure the company operations, strengthen its capital structure and position Wherehouse to compete effectively in the new music industry," said Wherehouse President and CEO Jerry Comstock.|ret||ret||tab|

He also said an increase in downloading music from the Internet and CD burning, plus continued pressure from discount retailers, resulted in declining sales for the specialty retailer.|ret||ret||tab|

While sales are dropping for Wherehouse Music, another music business, CD Warehouse, is doing well in Springfield. |ret||ret||tab|

"We are extremely healthy, and as a matter of fact, we are looking to grow," said Michael Vincent, manager of CD Warehouse at 1938 S. Glenstone Ave. "I have got to get bigger because we are bursting at the seams right now with CDs; with customers; our parking lot is constantly full. |ret||ret||tab|

"We are having those kind of nice problems that you have do deal with where everything is going so good."|ret||ret||tab|

Nationwide, CD Warehouse closed nearly 200 stores in the past 1 1/2 years, Vincent said, but the local store has seen 11 straight years of double-digit growth.|ret||ret||tab|

High prices and poor location choices are just a couple reasons Vincent believes stores like Hastings and Wherehouse have closed. |ret||ret||tab|

"They have a bad business model in the fact that they build their stores too big in high rent areas, and that forces them to be priced out of competition," Vincent said.|ret||ret||tab|

Downloading music from the Internet and CD recording technology continue to challenge music retailers, not to mention the recording companies. |ret||ret||tab|

"You can put a CD on the Internet, and millions of people can download it," Vincent said.|ret||ret||tab|

It is a growing problem, but Vincent said he does not blame consumers.|ret||ret||tab|

"The labels need to come to the consumers and offer them lower prices on CDs or give them more for their money if they are going to go into people's computers and stop them from downloading or stop them from copying CDs. They need to make sure people are getting either the CD at a lower price or getting more for the money on the CD," Vincent said.|ret||ret||tab|

Even with more and more people using technology that takes away business from specialty stores, Vincent, who has managed CD Warehouse for 11 years, said a music store can be successful.|ret||ret||tab|

"I attribute (increasing sales) to the fact that we are able to keep our prices on the lower end, very competitive, and I have an excellent staff that I am able to hold onto for a long time so there is a lot of consistency," Vincent said.|ret||ret||tab|

[[In-content Ad]]