Monday, August 25, 2008

During Recession and Shrinking Music Industry, Newbury Comics Opens up a New Superstore

Norwood superstore sets Newbury Comics record

Thirty years after opening its first store in a converted studio apartment on Boston’s Newbury Street, Newbury Comics is tackling its biggest experiment yet, even as digital downloading continues to erode CD music sales.

The independent chain is opening a Norwood superstore in a former Boch Kia dealership. At 12,000 square feet, it’s more than twice the size of Newbury Comics’ average store and will feature a permanent sound system and movable stage for performances, interactive game-playing, a coffee bar and Wi-Fi.

The store, expected to open this weekend, will be the 29th for Newbury Comics, which projects companywide revenue of $77 million this year. Along with a Faneuil Hall Marketplace location that opened three weeks ago, it represents the chain’s biggest store investment in a decade. The company has put more than $2 million into the Norwood location, including $1 million-plus in inventory.

Although Newbury Comics’ sales have been flat for four years, and profit is down 10 percent from 2007, chief executive Mike Dreese believes it’s the correct time to take a risk and make a big statement.

“Every time the economy goes into a recession, that’s when you want to invest,” said Dreese, 52, an MIT drop-out who co-founded the company with his college roommate, John Brusger. “We’re relatively strong going into it. Virgin (Records) just pulled out of town, Tower is bankrupt. If we’re going to expand, we should do it now.”

The superstore idea sprung from Dreese’s friendship with car czar Ernie Boch Jr., whom he met in the late 1970s when Boch was a student at Berklee College of Music.

“Ernie has been a huge Newbury Comics fan forever,” Dreese said. “He originally brought up an idea of trying to co-locate a car dealership with Newbury Comics.”

But Boch’s exit from the Kia business allowed Newbury Comics to open a store with a completely different look and feel. Much of the difference is in the merchandising. The store will carry extensive inventories of certain products, including vinyl records.

“There’s a huge resurgence in vinyl,” said Dreese, noting that many bands are releasing albums on vinyl and 18- to 20-year-olds are buying turn-tables. “We sold 600 to 800 in the last two months.”

Newbury Comics will sell more than $1.5 million in vinyl this year, up 70 percent from a year ago. The growth comes as its CD music sales have declined to about 43 percent of overall sales, down from 75 percent a decade ago.

“The recorded-music industry is doing quite poorly, but there’s a reason why we didn’t change our name years ago,” Dreese said. “We’ve always had a lot of other merchandise. We think of ourselves as a pop culture department store.”

The Norwood store also will devote expanded space to movies in the Blu-ray Disc format, products tied to local sports teams and jeans, which the company now sells in a couple of its locations.

“We expect a lot of what we set up there won’t work that well, but we think it will be a good testing ground,” Dreese said. “The best in breed of those will spread to other Newbury Comics stores.”

[Boston Herald]

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