Canadian Record Store Chain Grows 925% — In One Year

Toronto-based Record Store Chain Sunrise

This is the story of a small Canadian record chain that made it through the hard times.  Then, became one of the largest record store chains in North America.

Ten years ago, the fate of traditional record stores looked really, really bleak.  By 2007, file-swapping had eviscerated CD sales, and vinyl was an antiquated format for niche audiophiles.

People still loved music, they just weren’t going to record stores.  Instead, they were stuffing their iPods with thousands of songs while spending their savings on festivals.

Accordingly, established record stores were going bankrupt, unable to make ends meet.  Up in Canada, that included HMV, which recently shuttered more than 70 stores during a gruesome bankruptcy process.

Enter Sunrise Records, which made a daring move earlier this year.  The 8-store, Toronto-based chain was bumbling through the downturn but steadily making a comeback.  In fact, their firsthand experience told them that vinyl sales were resurgent, and music fans wanted something tangible.

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In March of this year, Sunrise made an astounding bet.  They saved 70 HMVs from bankruptcy, negotiating bottom-scraping deals to keep the stores afloat.  Overnight, Sunrise had 78 locations across Canada.  After that, another 4 stores were added, bringing the total to 82.

That’s a 925% expansion in one year.

Sunrise actually got started in 1977.  That was during the first wave of vinyl, when the format wasn’t nostalgic but merely necessary.  The story started on 237 Yonge Street in Toronto, when brothers Malcolm and Roy Perlman purchased a dusty store from the Handleman Co.

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By 2014, current president Doug Putnam grabbed the reins and plotted a big expansion.

Putnam smartly bet on vinyl as a major driver of growth.  But a broader in-store experience is critical, complete with vintage items and merch.  According to Putnam, smart supply-chain capabilities are needed to ensure that stores are properly stocked.  “Modern retailing is simply not possible without strong IT systems capabilities,” Putman explained.

“We are building up these capabilities feverishly and have brought in nimble IT partners who can take us to market quickly.”

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Now, the company faces an entirely new set of challenges.  Instead of a regional mainstay, Sunrise spreads across a massive country — as wide as the US but with far fewer people.  That puts more pressure on supply chain efficiency, not to mention operational overhead.

Here’s just a sprinkling of stores that have recently assumed the Sunrise masthead.

British Columbia

  • Metrotown – Burnaby.
  • Orchard Park – Kelowna.

Alberta

  • Sunridge Mall – Calgary.
  • Marlborough Mall – Calgary.
  • West Edmonton Mall (including stage for performances).
  • Londonderry Mall – Edmonton.
  • Peter Pond Mall – Fort McMurray.
  • Park Place Mall – Lethbridge.
  • Medicine Hat Mall – Medicine Hat.

Saskatchewan

  • Southland Mall – Regina.

Manitoba

  • Kildonan Place – Winnipeg.
  • Polo Park – Winnipeg.

Ontario

  • Quinte Mall – Belleville.
  • Stone Road Mall – Guelph.
  • Limeridge Mall – Hamilton.
  • Square One – Mississauga.
  • Place d’Orléans – Ottawa.
  • Heritage Place Mall – Owen Sound.
  • Pickering Town Centre – Pickering.
  • Station Mall – Sault Ste. Marie.
  • The Pen Centre – St. Catharines.
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​Quebec

  • Les Galeries de Hull – Hull.
  • Place Fleur de Lys – Quebec City.
  • Promenades St-Bruno – Saint Bruno.
  • Place du Royaume – Saguenay.
  • Centre commercial Les Rivières – Trois-Rivieres.
  • La Grande place des Bois-Francs – Victoriaville.

​New Brunswick

  • McAllister Place – Saint John.
  • Regent Mall – Fredericton.

 


 

5 Responses

  1. Avatar
    avoid big cities

    Pretty cool they’ve been able to have this success without even one location in Canada’s three biggest markets of Toronto, Vancouver and Montreal (St. Bruno isn’t Mtl).

    Reply
    • Avatar
      Cavan

      “Here’s just a sprinkling of stores that have recently assumed the Sunrise masthead.”

      Per the article, this list is a sample of stores that just became Sunrise locations. Here is a complete list of stores: https://www.sunriserecords.com/sunrise-store-locations/

      The list includes stores in major Canadian cities such as Vancouver, BC, Tornoto, ON, and Montreal, QC.

      Reply
      • Paul Resnikoff
        Paul Resnikoff

        Thanks for filling that out. Yeah, that was just a sample of new stores, spread across the giant Canadian land mass. Sunrise is actually Toronto-based.

        Reply
  2. Avatar
    hateon

    something about this doesn’t smell right. vinyl growth, but so niche, not for
    malls. and carrying t-shirts and dvds etc? when other retailers are struggling?
    wouldn’t be surprised if in the background is goldmans sachs type of bank lender who loads the co. up with debt, so that in a few years the stores are bankrupt but the CEOs have got their bonuses through the interim huge ‘growth’.

    Reply
  3. Avatar
    andrew

    the growth % is misleading because their growth came thru taking over 77 HMV stores. Also, a great % of those stores are in secondary/tertiary markets where there is a higher demand for physical media (CD/DVD) as LTE is not as prevalent in those markets, consumers drive longer distances, etc.

    However, Vinyl + Ticketing + Merch can significantly boost a store’s margins so I wouldn’t completely discount that.

    Reply

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