Aaron Harris for the Toronto Star
Case Studies

June Records taps the vinyl revival, but can a niche Toronto market pay the rent?

Vital Stats
Owners:
Ian Cheung and Dennis Reynolds
Address:
662 College Street, Toronto
Contact:
(416) 516-5863
Field:
Music Retail
Employees:
2
Years active:
Less than 1
Offering:
Vinyl records, record players and audio equipment
Notable:
Imports hundreds of hard-to-get titles from European distributors, independent Canadian and U.S. labels

Before Ian Cheung hung the “OPEN” sign on his store, June Records, he was already facing stiff competition.

Toronto’s home to a slew of independent record shops, there were several other bids for the prime College street location, and the entrepreneur’s proposal was met with some skepticism from the building’s owner.

“I said, ‘I’m opening a vinyl record store’ and he replied, ‘Is there a market for that kind of thing?’” says Cheung, “He was kind of concerned.”

It was a legitimate worry, the store — which opened in June, once Cheung won the location’s former owner over with his business plan — is making money, but has yet to turn a profit.

Still, this doesn’t surprise Cheung. The past five years haven’t been kind to record stores in Toronto. On June 30, 2007, the flagship Sam the Record Man store on Yonge Street closed. Last summer, the much-loved Criminal Records on Queen Street West followed suit. And while there are still about a dozen record stores in the city, such Sonic Boom and Kops Records — where Cheung spent almost three years working as a managing employee — survival has meant serious shifts in retail space size, employee numbers, and the makeup of inventories.

And inventory is what Cheung uses to set his store apart from the competition.

“There’s nothing in this store that we wouldn’t consider good enough for ourselves,” he says, “We’re not going to carry a product that we don’t stand behind.”

June Records stocks between 50,000 and 70,000 vinyl releases, as well as a small selection of record players and audio equipment. While customers can expect to find The Beatles’ Abbey Road and other classic rock staples, Cheung tries to concentrate on rarities, such as a box set by German minimalist electronic artist John Bender, Los Angeles’ power-pop band The Quick’s 1976 album Mondo Deco, and various other imports and small-label offerings.

“Every title that you pick reflects what kind of store you are,” he says, “by choosing those titles, you’re already setting yourselves apart.”

And a record store can also make its name with what it doesn’t carry. June Records sells no CDs, DVDs, books, or music-related merchandise, with the exception of artist designed art and clothing. An unusual, but deliberate choice, says Cheung, and one that he feels reflects the changing landscape of how people buy music.

“Vinyl is the only format that’s never really gone away,” he says, “It’s had its ups and downs, but vinyl’s just kind of always been there.”

Mazher Jaffrey, president of the Canadian Business College in Toronto, isn’t convinced that sticking to just one main product will yield successful results.

“My gut tells me that, as a business, they’re limiting themselves,” he says, “I’m afraid I’m not optimistic.”

While Cheung declines to provide specifics when it comes to June Records’ sales, he says they haven’t yet reached the cost of the store’s rent. This means hiring additional staff isn’t yet a possibility — Cheung’s only help is his co-owner, Dennis Reynolds — even though he admits running the entire operation with such a skeleton crew is exhausting.

“It can be overwhelming,” he says, pointing to the owners of Criminal Records. They closed shop, not because of money issues, but because, as Cheung says, “they wanted their lives back.”

Still, Jaffrey says more work may be needed to get the store turning a profit. He suggests building a lounge area or selling coffee and other refreshments. Cheung has no such plans, but says he does want to up his business’ value proposition with live in-store performances, film screenings, and by featuring limited-edition, artist-created merchandise for sale.

But, even though he knows the business needs to eventually turn a profit, he didn’t open a record store for the money.

“Once we reach a point where the store is self-sustaining, we can shift our focus more to the extracurricular stuff that supports the community,” he says, “To me, that’s what it’s all about.”

It’s this sense of community that Cheung believes will bring him lasting success.

“For me, a record store isn’t just where you get music, it’s a place where people with like interests gather,” says Cheung. “We’re just trying to create a vehicle and see what happens.”

EXPERT VIEWS

As Interviewed by: Tom Henheffer

Vinyl sales have been increasing substantially — going from 900,000 units in 2006 to 3.9 million in 2011. June Records has a strong niche and a growing potential customer base, but the challenge is becoming known in the marketplace. Music aficionados will spread the word, but Cheung has to figure out where to find them, and how to get collectors in the store. To do this he needs a solid web presence, and he should also use social media to engage with groups of enthusiasts. And it might be worth exploring alternative revenue streams in that vinyl space. Can Cheung restore records, then sell them used at a premium? What about selling turntables, headphones and other audio equipment? He talked about bringing in bands — can he charge them to use the space, and leverage their audience to attract more customers? Cheung has a lot of options, and there is momentum here, he just needs to access the right people, optimize his customer experience, and become a one-stop-shop for this re-emerging format.

by Mike Michell

June records is in a great position to tap the resurging demand for vinyl, and their concentration on a broad offering — from the popular to obscure — will get casual collectors and serious enthusiasts alike in the door. That offering is a differentiator, and they should leverage it more online — as it stands, the store has issues with its web presence. A blog about the company shows up in searches, but their main website doesn't. And they’re active on social media, but don't have their catalogue online. The shop should optimize the site for mobile, add a listing of its available titles and an ecommerce feature. Doing so, and beefing up their search engine optimization, will make them easier to find and attract a customer base that goes well beyond the physical store’s foot traffic. And the shop should be working to build that community they care so much about. Hosting events, art, music and film showcases, and selling tickets and exclusive merchandise — really becoming a hub for music lovers — will be key for spreading word-of-mouth.

by Tisha Rattos

The trick is staying very focused — concentrating on vinyl is what differentiates the store from other music retailers. They have to be very selective about anything else they try to sell. If an artist with a new record issues a limited edition picture or a poster, it could be sold because it’s directly connected to the store's core offering. But it will be very tempting to start offeringbooks or toys or generic posters, and it's easy to get distracted and start selling a little bit of everything. If that happens, they'll lose what makes them stand out. But they should expand onto the internet with a good web presence. The store needs a website where people can see their offerings, and maybe even order online. And the owner should be active on social media and in vinyl discussion groups, and also try to get a conversation started on his own website. That will increase customer engagement and generate more word of mouth about the store. It's quite a bit of work, but if he goes at this business in a half-hearted way, it'll die.

by Theo Peridis

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