Music business changes hands

Internet competition sparks sale of Record & Tape Traders

November 16, 2007|By Tricia Bishop | Tricia Bishop,SUN REPORTER

They survived disco and rap, pop and grunge, over-coiffed boy bands and over-hyped divas.

They stood strong through the shift from vinyl to disc and eight-track to cassette. They weathered criminal charges for selling bootleg recordings a decade ago and put spending money in college kids' pockets by buying - then reselling - used music, movies and games.

But Kevin Stander and Steven Smolen, who founded Record & Tape Traders 30 years ago in a Towson house, couldn't survive digital.

Internet killed the record store.

Today, the men officially pass the business to Georgia-based Value Music, which bought the company and eight of its nine regional locations for an undisclosed sum. Few changes are expected and the name should remain on stores. The deal closes today.

"Our business is still good ... the company is still profitable," Stander said yesterday, pointing to movie and other sales.

But music revenue has steadily declined as customers stopped browsing and buying and instead shifted toward surfing and downloading. In the first quarter of 2007, U.S. sales of compact discs were down 20 percent from a year earlier, while digital sales of individual songs were up 19 percent, according to industry analyst Nielsen SoundScan.

"The business has been getting a lot [more] Internet-based, iPod-based," Stander said, which helped him and his partner make the decision to sell. They already closed three locations this year - in Owings Mills, Annapolis and Charles Village - and plan to close a Bel Air store by the end of the year.

Both men will stay on as consultants during the next few months of transition, said Stander, who plans to refocus his energies into commercial real estate.

Two decades ago, the pair was placed on probation for selling bootleg records. A decade ago, they agreed to pay $20,000 in court fines for selling bootleg CDs as part of a nationwide crackdown on illegal recordings.

"It was a cool thing to us. It was a cool thing to our customers," Smolen told The Sun in 1996, a few months after police and recording industry investigators raided their warehouse and four stores, seizing 2,000 recordings. "We were just trying to service the people who wanted it."

It's uncertain what will happen to Record & Tape Traders' 100 employees.

Value Music did not return a telephone call for comment yesterday. But its president, Rob Perkins, told the online version of Billboard magazine last week that the company has "great people working in their stores." Stander said he expects 90 percent of the employees to stay on staff.

The Bel Air location is another story.

Manager Shawn Kelley said the "bomb was dropped" on him Sunday, and he has been struggling with "shock and disappointment" ever since. He expects he'll still have a position, but knows there are no guarantees.

"I'm still a little uneasy," said Kelley, who has worked for Record & Tape Traders for more than three years. He said the store's part-time workers have already been told they won't have jobs after the closing.

Value Music has bought a half-dozen independent music sellers in the past few years, leaving them pretty much as is, identity intact.

Stander expects that to be the case here, with the tradition of buying and selling used and new media to continue on.

"It was a good run," Stander said. "I enjoyed it, but everything comes to an end, and I think this is coming to a good ending. [Value Music] is a company that's very like-minded and wants to grow."

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