also Fopp opened a new Fopp store in Cumbernauld earlier this month.
Opening a record shop in Cumbernod? No wonder they've went out of business!
― Tom D., Friday, 29 June 2007 11:08 (sixteen years ago) link
Did they get John Gordon Sinclair and Clare Grogan to open it?
― Marcello Carlin, Friday, 29 June 2007 11:18 (sixteen years ago) link
just got this press release:
'It is with great regret that we announce the closure of Fopp.
Our store chain is profitable, well regarded and loved by our loyal customers and staff. However we have failed to gain the necessary support from major stakeholders, suppliers and their credit insurers to generate sufficient working capital to run our expanding business.
We would like to thank staff and customers for their support over the past 25 years'
ENDS
A fopp spokesperson
― scottpl, Friday, 29 June 2007 12:25 (sixteen years ago) link
It's the Day the Music Died
― Tom D., Friday, 29 June 2007 12:27 (sixteen years ago) link
I'm actually quite stoked about this.
― jim, Friday, 29 June 2007 12:29 (sixteen years ago) link
What, about several hundred people losing their jobs? Not a cause for celebration, surely...
― Neil S, Friday, 29 June 2007 12:33 (sixteen years ago) link
As it was the only shop (about from...cough...IKEA) that I couldn't leave without having purchased several items I'm annoyed that they seemed to have cocked it up with the purchase of MVC/whatever the hell it was called. Godammit I HATE going in HMV or Virgin.
― Ned Trifle II, Friday, 29 June 2007 12:42 (sixteen years ago) link
xpost. Well it would have been less people if they hadn't decided to go on an expansion rampage while their business was already failing, opening shops all over the shop while their existing ones weren't even viable.
― jim, Friday, 29 June 2007 12:43 (sixteen years ago) link
That's not those staff members' fault though, is it?
― Neil S, Friday, 29 June 2007 12:45 (sixteen years ago) link
-- jim, Friday, June 29, 2007 6:43 PM (2 minutes ago) Bookmark Link
fewer. why are you 'stoked' though? you were personally offended by fopp's expansion?
― That one guy that quit, Friday, 29 June 2007 12:47 (sixteen years ago) link
"Disaster for Scotland!"*
(obscure 70's football references-R-us)
― Tom D., Friday, 29 June 2007 12:47 (sixteen years ago) link
xpost. Aye.
― jim, Friday, 29 June 2007 12:51 (sixteen years ago) link
Profitable - yes. But at 4.6% of revenue, no-one would be interested in putting money into this as an investment.
They could of course get VC and change strategy, but they would need to avoid a strategy that brings them into direct conflict with HMV. They'll lose that battle.
Everyone I know who uses Fopp pretty much only buys cheapo items - they would need to find a way to subsidise that by selling more close-to-full-price product. Their marketing strategy was pretty naive - you can use the bargain basement strategy to gain share, but pretty soon you need to change tack to start making some money. They never got to the making money stage, yet foolishly expanded at a rate that their cash flow couldn't support.
Their stores were laid out pretty badly (for them) - lots of cheap CDs near the door and on big displays, but few incentives to buy more expensive items i.e buy this CD for £10 and get another for £4.
― Dr.C, Friday, 29 June 2007 12:59 (sixteen years ago) link
They never got to the making money stage, yet foolishly expanded at a rate that their cash flow couldn't support.
I'm sure the first few stores made money.
― Ned Trifle II, Friday, 29 June 2007 13:07 (sixteen years ago) link
They did perfectly well for 15-20 years or so
― Tom D., Friday, 29 June 2007 13:08 (sixteen years ago) link
Sad to think that there were four record shops in Byres Road and now there's only Lost in Music left.
― Billy Dods, Friday, 29 June 2007 13:13 (sixteen years ago) link
Making enough money (to expand as they wanted).
Yes, they did well until they tried to expand too fast. One bad decision.
― Dr.C, Friday, 29 June 2007 13:14 (sixteen years ago) link
employees not paid this month = sadface
― Alan, Friday, 29 June 2007 13:16 (sixteen years ago) link
That's exactly what I said exactly one week ago! (xp)
― Tom D., Friday, 29 June 2007 13:17 (sixteen years ago) link
I would have thought that there is no way out of this, unless they can sell off a lot of newly acquired stores and some of the least successful old stores. They would have to then start again with a core of stores and a new strategy. I'd say it's viable, but of marginal interest to investors.
― Dr.C, Friday, 29 June 2007 13:17 (sixteen years ago) link
if their store chains are "profitable" then not paying their employees for a month of work is surely against the law?!!
― Tracer Hand, Friday, 29 June 2007 13:23 (sixteen years ago) link
i mean i don't know how bankruptcy works in the UK, but if you're "profitable" in the US, you don't get to do the whole "here's a briefcase full of money, representing a penny for each pound i owe you - take it or leave it" gambit
― Tracer Hand, Friday, 29 June 2007 13:25 (sixteen years ago) link
They owe the employees and they owe the bank. Usually the bank wins.
― Dr.C, Friday, 29 June 2007 13:26 (sixteen years ago) link
That really sucks. Especially because they must have seen this coming.
― jim, Friday, 29 June 2007 13:34 (sixteen years ago) link
if they owe both employees and the bank then they are operating under a very different definition of "profitable" than the one most people i know are familiar with
― Tracer Hand, Friday, 29 June 2007 13:47 (sixteen years ago) link
That "profitable" was for 2006. 2007 has seen stupid expansion, no cashflow, no stock replenishment, closed shops and no business. I don't think their balance sheet will lack red numbers for 07.
― onimo, Friday, 29 June 2007 13:49 (sixteen years ago) link
so what they meant was "our stores WERE profitable". i guess it was just an honest verb tense mixup.
― Tracer Hand, Friday, 29 June 2007 13:52 (sixteen years ago) link
Thing is: Record shops are in a constant state of 'debit', are they not?
― Mark G, Friday, 29 June 2007 13:53 (sixteen years ago) link
That said, you can carry debt and be a "profitable" business as long as you're servicing said debt with agreed payments.
― onimo, Friday, 29 June 2007 13:54 (sixteen years ago) link
re: if their store chains are "profitable" then not paying their employees for a month of work is surely against the law?!!
The Fopp shops were profitable pre the acquisition of 67 stores from Music Zone, and since then (February 2007) they have closed over half of these !
More from The Times
Fopp confirms closure of all music stores http://tinyurl.com/364g58
Other sources questioned whether the chain was profitable and it is thought it may have over-reached itself with the acquisition of 68 Music Zone stores from the administrator in February.
Of those stores it bought it later had to shut some 37 and now has around 81 stores in total.
With the debt of acquiring the Music Zone stores, plus the costs and loss of turnover of closing over half of these post acquisition - has hemorrhaged cash from the business.
In acquiring Music Zone stores from the administrators Deloitte, - Fopp obviously didn't probably analyse the implications of how many stores they could afford to take on. The additional costs of conversion, the financing of the debt, turnover in a difficult retail trading conditions, the working capital required to keep the business going.
They acquired too many stores and just didn't have the finance to continue.
How much did they pay to acquire the Music Zone shops?
Apparently this was financed by short term floating debt, with high interest rates
Why weren't the legal implications of Music Zone stock sorted with lawyers and accountants before they agreed to take over the Music Zone stores?
― djmartian, Friday, 29 June 2007 13:55 (sixteen years ago) link
I am glad I got rid of those vouchers, yet slightly annoyed that they seemed to have put big "vouchers available" signs up in every aisle this week.
I will miss them, and I will miss this thread.
I reckon, "suck it and see" must have been pretty dire for profits, much as I loved it myself.
― PJ Miller, Friday, 29 June 2007 13:58 (sixteen years ago) link
Would another retailer buy the Fopp chain / brand?
Tesco: Are always looking to expand
WHsmith: Once owned Our Price.
Woolworths: would they buy the Fopp Brand for a knock down price and once again enter the specialist music chain business.
― djmartian, Friday, 29 June 2007 14:02 (sixteen years ago) link
Sir Alan Sugar
― Tom D., Friday, 29 June 2007 14:03 (sixteen years ago) link
Onimo is right. Many companies run with high levels of debt at the same time as being profitable. It's not realistic to fund operations with cash. But if they get to a situation when investors not only don't see a positive return in the medium term, but think they may actally lose money, with no prospect of ever getting it back, they'll cut and run.
― Dr.C, Friday, 29 June 2007 14:04 (sixteen years ago) link
Funny, I had to rescue this thread from "unanswered questions" before it managed to get going...
― Mark G, Friday, 29 June 2007 14:05 (sixteen years ago) link
PJM - I shall miss your exhortations for people to 'suck it and see' when ever they're not sure about a record. :)
I never used that facility myself. That must mean that I'm still sucking.
― Dr.C, Friday, 29 June 2007 14:07 (sixteen years ago) link
So...*cough*...anybody heard anything about a closing down sale?
― Matt #2, Friday, 29 June 2007 14:08 (sixteen years ago) link
That never happens
― Tom D., Friday, 29 June 2007 14:09 (sixteen years ago) link
Presumably distributors get their stock back - or some of it.
― Dr.C, Friday, 29 June 2007 14:11 (sixteen years ago) link
I remember the Virgin Megastore in Glasgow (beside Central Station) had a closing down sale - there were queues outside it - but that's the last one I remember
― Tom D., Friday, 29 June 2007 14:13 (sixteen years ago) link
It is thought the stores are closed temporarily and some may be re-opened once the administrator has examined the books.
So, who knows (as yet)
― Mark G, Friday, 29 June 2007 14:17 (sixteen years ago) link
I never reckoned much with the book section myself.
― NickB, Friday, 29 June 2007 14:20 (sixteen years ago) link
RIP Fopp. The best record store Leamington Spa ever had for sure. This stinks.
-- Ned Trifle II, Thursday, 28 June 2007 22:10 (Yesterday) Link
Amen - the internet will be the only option for me now :(
― tpp, Friday, 29 June 2007 14:28 (sixteen years ago) link
http://news.bbc.co.uk/1/hi/business/6252300.stm
― Brigadier Lethbridge-Pfunkboy, Friday, 29 June 2007 14:41 (sixteen years ago) link
Analysts say that the chain has been hit by the rise of supermarkets and online retailers selling CDs and DVDs, as well as the surging popularity of downloading music from the internet.
I can't see supermarkets in direct competition with Fopp apart from new release indie albums, which were (I assume) a tiny part of Fopp's sales.
Where else can you pick up all this back catalogue stuff new, assuming you want a physical disk?
― onimo, Friday, 29 June 2007 15:06 (sixteen years ago) link
supermarkets are not the main competition for fopp.
― That one guy that quit, Friday, 29 June 2007 15:10 (sixteen years ago) link
Amazon. Often for the same price.
― Dr.C, Friday, 29 June 2007 15:11 (sixteen years ago) link
Internet sales are probably a bigger problem for high street stores than downloading, illegal or otherwise, I should think.
― Colonel Poo, Friday, 29 June 2007 15:14 (sixteen years ago) link
Aye, that's my belief.
― Scik Mouthy, Friday, 29 June 2007 15:16 (sixteen years ago) link
Indeed. So why so many outlets?
― Tom D., Friday, 29 June 2007 15:17 (sixteen years ago) link