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Did Schoolkids close because it refused to adapt?

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If you talk music landmarks in Chapel Hill, Schoolkids Records challenges only Cat's Cradle for the top spot. Since 1974, Schoolkids has supplied the college town with records, cassettes and CDs, but, last week, the storefront was empty and the stock was boxed away in a Raleigh warehouse. As he dismantled shelves, manager Ric Culross put it best when he put it simply: "It's a very sad store right now."

Schoolkids' sales have dwindled considerably over the last decade. In 1998, Culross says Buena Vista Social Club's self-titled album was the Chapel Hill location's top-selling record, selling 760 copies. In 2007, The Shins' Wincing the Night Away earned that top spot but sold less than half that number. The music industry's slumping sales are systemic and well-documented, and record stores continue to close: Rhino Records in Los Angeles closed in 2005, the same year The Guardian reported the Virgin Mega Stores chain had lost 260 million British pounds in the previous two years. The stores began closing in 2006. As many as 20 Schoolkids Records outlets once dotted college towns along the East Coast. Now, they remain only in Raleigh and Athens, Ga.

But some industry experts argue that independent record stores could survive and even flourish. Achieving this success, though, may mean overhauling a decades-old model, either by expanding inventory to include non-music product lines or reducing inventory to serve only niche markets. So did Schoolkids close because it refused do either of these?

Many American independent record stores are members of five partnerships: the Alliance of Independent Music Stores (AIMS), Coalition of Independent Music Stores (CIMS), Music Monitor Network (MMN), Newbury Comics or Value Music Group of Indie Stores. The coalitions cooperate more than they compete. They work to support independent music stores by acting as contact points for record labels to distribute music to member stores.

The coalitions also provide members with unique promotional products to make buying music at an indie store—as opposed to online or at a larger retailer like Wal-Mart—more appealing. In 2006, for example, when someone purchased The Hold Steady album Boys and Girls in America, they also received a comic book from the band. CIMS released the Tift Merritt live album Home Is Loud on its own record label. The disc was only available at independent stores, including Schoolkids.

"As long as the economy holds up, we'll do as well as Barnes & Noble or Best Buy or anyone else," says Michael Kurtz, head of MMN. MMN recently added 10 member stores, bringing its total to 91 independent retailers. AIMS added 10 stores earlier this month, bringing its total to 32, and the 50 CIMS stores are doing well overall, says coalition marketing director Scott Register. But Schoolkids is a founding member of CIMS, and its Chapel Hill store didn't survive. Why?

Schoolkids' demise in Chapel Hill is due, in part, to the store's reluctance to shift with changing markets: The store boasted a reputation for its wide selection, so that releases from small independent labels often sat on shelves beside the latest major-label music. Culross says this is an element of the store he's always valued.

"There was product inside the store for every age group," he says. "If you reduce the selection, you reduce the importance of music. ... I would have a problem not offering Vietnamese music here if someone wanted me to carry more hardcore punk."

Two years ago, Schoolkids even increased its selection by opening a short-lived second storefront on Franklin Street. That storefront housed used CDs, vinyl and new country, folk, jazz and DVD stock, allowing the other store to increase its selection of rock, heavy metal and hip hop. In retrospect, Culross says stores must focus their inventory as the market shrinks, but Schoolkids wanted to continue serving a broad spectrum of customers.

But Register indicates less is increasingly more: "The people who shop in our stores are such music purists. ...We're a niche business." 

Click for larger image • Can record stores like Schoolkids survive? - PHOTO BY JEREMY M. LANGE

Indeed, less than half of a mile away from Schoolkids on Franklin Street, CD Alley—the only remaining independent record store in Chapel Hill that stocks new music—maintains a smaller, more concentrated selection and dedicates a significant chunk of its shelf space to vinyl. Owner Ryan Richardson says he capitalizes on relatively low rent and overhead to operate something of a niche store: He doesn't see student customers as a staple of his business, and he doesn't stock most new material from major record labels. His customers, he says, tend to listen to at least one of the area's college radio stations or WCOM in Carrboro. With so much independent music on the airwaves, "We can get away with stocking that stuff."

Concentrating on vinyl is working for small independent record stores: Vinyl sales at domestic MMN stores are up 600 percent from a year ago, says Kurtz. Though they still only represent 5 percent of total revenue, records retain old customers and attract new customers with their sound quality and cover art. Richardson says vinyl sales account for between a quarter and a third of CD Alley's total sales, but—like many store owners, including those at Schoolkids—he's taking advantage of such increased vinyl sales by adding a new product line: turntables.

Just like owning vinyl, going to a record store was once integral to a certain lifestyle. Eric Levin, head of AIMS, thinks employing artists and musicians helps build a community around a record store. This community has long drawn people into record stores. He hopes to renew that feeling: "It's awesome to plug into [the Internet]," Levin says, "but it's also pretty awesome to unplug and meet girls."

That's the idea behind Record Store Day. On April 19, Record Store Day—a project among all five record store groups—will celebrate the record store community in hopes of helping to revive it by offering promotional items, hosting barbecues and presenting concerts. Celebrity talking heads like Peter Gabriel, Paul McCartney and Bruce Springsteen have lent their endorsement for the day, and film writer-director Cameron Crowe described record stores as "the soul of discovery, and the place where you can always return for that mighty buzz" for the occasion.

The irony of the record-stores-as-a-lifestyle revival is that record store survival may depend on expanding into product lines collectively known as "lifestyle products," Register says. These have little to do with music. Just as many stores now sell turntables, they've also expanded into products like incense, black lights, toys and apparel.

Culross admits Schoolkids didn't make this transition. They, in fact, chose not to make it: "'I don't know anything about Martian hats, so I'm not going to sell Martian hats,'" he says, quoting Schoolkids owner Mike Phillips. It's an idealistic view that inspires sympathy. Schoolkids stuck to what it knew. "When you pass through the doors of a good music store, you enter an entirely vast world of what people are trying to say and what they have in their heart," says Culross, on his way home from another day of packing the store into a U-Haul. "And that's what I'll miss the most: that someone will not get the message."

But as CIMS' Register puts it, selling this other merchandise "allows you to sell music."

And isn't that the point, anyway?

Cat's Cradle hosts a free "Goodbye, Schoolkids Records" concert Saturday, April 5, with performances by The Heist And The Accomplice, Hammer No More The Fingers, Ben Davis & The Jets, Schooner, Michael Rank / Mark E. Smith, North Elementary and Wil Donegan & The Apologies. Hoping to develop the next generation of independent record store owners, customers and artists, donations benefit the Orange County Elementary Music Program.

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