Everything Must Go

On its final day, Sunday, June 13, Tower Records is full of customers. It's a day when all of Tower's shopping baskets are in use and brimming with goods, as if consumers are carrying buckets of water back to the fire. Boxed sets and DVDs spill to the floor before reaching checkout. CDs fly off the shelves.

Meanwhile, the shelves are flying off the shelves as other local businesses make bids to purchase leftover racks and countertops. Everything must go. If business had been this amped up every Sunday afternoon, Tower might be spending its summer vacation in Austin.

When the record store replaced the beloved Varsity movie theatre in 1990, many Austinites were outraged. Today, the evacuation of Tower is even more troubling, as it confirms the fear of an epidemic affecting the city's record-shopping community.

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The Two Towers

"Some people view us as being corporate, but Tower is still an independent company," says the store's local operations manager Dave Mulholland days before his operation is put to rest.

If Mulholland sounds oddly defensive of the company that's just given him a pink slip, it's because he's dedicated his entire adult life to working for Tower Records. After 12 years at different locations across the country, Mulholland's relationship with the company comes to an end with the Austin store.

Mulholland had been fighting for a transfer to Austin from the Seattle store for a decade, but only got his wish two years ago. Unfortunately, it was a short-lived dream that ended with a phone call on Monday, March 15.

"It was my boss who said, 'They're closing your store down,'" he remembers.

According to Mulholland, corporate executives had assured him that the store was in no danger of shutting down, especially since the company has an option on the lease through 2010. When Tower filed for Chapter 11 bankruptcy in February, they were given the option of relinquishing regional leases they did not wish to keep.

"I think they felt that instead of being stuck in a lease that long, it was just better to get out," Mulholland recalls. "A lot of people from the company were sad about that, because this is such an important city to have a store."

The Austin location managed respectable business, but the university-based location proved problematic. Coupling a lack of available parking with a customer base that's out of town three months of the year, a college-area record store ceased to make financial sense.

"There was discussion at one point of moving somewhere else in Austin," says Mulholland, who claims that all such plans have been killed.

When news spread of the store's closing, many employees left, but several stayed for the long haul. The final days took their toll on Mulholland and his staff, as he likens the experience to "spending the final days with a dying loved one." The store saw much of its stock sell quickly under discounted prices, with remaining items shipped to the nearest Tower location, in Dallas.

Tower offered many Austin employees transfers to other stores, but Mulholland in particular has no plans to leave his new dwellings. In fact, he remains surprisingly optimistic about his former employer and his former industry.

"Obviously, there are always going to be record stores," he says. "I think that the retail music industry is just gonna have to cater more to the whole downloading thing."

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Eat the Niche

"Doing what we're doing is a little more complicated than it appears on the surface," maintains Jason Enright, former co-owner of Jupiter Records. What Jason's doing, with his brother Ryan, is opening a music store for local music downloads (iTunes for Austin, so to speak) called "Jupiter Brothers."

In January, the Chronicle profiled the Enrights after Jupiter closed its second and last location in the Hyde Park-area Hancock Center ("Baby, Let Me Follow You Down," January 23, 2004). At the time, they were switching over operations to an online service offering Austin artists a place to sell their songs by the download. Five months later, there's still no Web site. Enright claims it's only a matter of time.

"Usually, whenever you plan [a business], things always happen that put you in a position of new decisions to make, and new hurdles to overcome," he offers vaguely.

Enright watched Tower's departure unfold with interest, not to mention the recent closing of Thirty Three Degrees farther up on Guadalupe. Both cases only confirm his and Ryan's decision to get out of the retail record business.

"It's not a cycle," he states. "We don't think you're going to see record sales coming back all of a sudden. If you consider the entire market of record buyers in Austin, and you start taking out the record stores to where it's just one store, maybe that can exist. Now, after this, there's only Waterloo."

Not exactly, but the sentiment isn't new.

"It's tough being in the same town as the best record store," says another local record store owner, Encore's Chuck Lokey, referring to Waterloo Records.

Encore Movies & Music (8820 Burnet Rd.) faces the dubious distinction of being located north enough to compete against Best Buy and Circuit City, yet independent enough to compete against Waterloo. It gives them the worst of both worlds, as the store is doing well, but still struggling to stay afloat.

"The last two years have been horrible," nods Lokey. "We're doing better because of the attrition of our competition. Business is starting to come back a bit."

Lokey, who opened his store in 1988, says "niche marketing" is the secret to Encore's longevity. Besides offering DVDs, something in which Encore was an Austin pioneer, Lokey points out that key staff members have begun building an impressive selection of heavy metal. This continues to set the store apart from its competition, something many stores are forced to do in order to stay afloat.

This stab at finding a specific audience has made Music Mania (3909-D N. I-35) a success story after 15 years in Austin. One needs only take a step inside the heavily decorated store to realize that Music Mania's specialty is hip-hop and R&B. There's not only mainstream hip-hop from Usher and Ludacris, but also Texas talents like Swishahouse and Nicknack.

"The stores that still exist better have a niche," offers Music Mania manager James Cooper. "If you're just a plain-Jane store, nothing sets you apart." Cooper says that first- and second-quarter sales at the store are on target to be ahead of that same period in 2003. "It's given us some positive hope," he acknowledges.

In addition to seeing sales rise due to the closing of other Austin record stores, Cooper also credits the increase to high-profile, major-label releases from store mainstays like Houston's Lil' Flip. It's this niche that keeps Music Mania strong. Encore's Lokey makes it clear that if you're getting into record store retail you'd better target your demographic.

"You have little stores opening up, but they're walking into a meat grinder and don't know it," points out Lokey.

The new stores he's speaking of are also trying to create a local market niche. As the Chronicle previously reported, former Thirty Three Degrees staffer Carlos Villareal is hoping to open his own store, which one assumes would also cater to the experimental-minded consumer base of his former employer.

Jason Costanzo, meanwhile, has Sound on Sound at 151 E. North Loop, a decidedly more vinyl-friendly space specializing in punk and metal. Alien Records, which recently relocated to the Hyde Park Marketplace at 41st and Guadalupe, also prides itself on its vinyl selection, geared toward the discerning DJ.

Vinyl has kept Antone's Records afloat on Guadalupe for 17 years. Manager Forrest Coppock attributes the store's staying power to its rare vinyl selection as well as its knowledgeable staff, something he feels is lacking in most record stores today. Even Tower's Dave Mulholland has considered opening his own store, though only if it serves a specific crowd.

"You can't carry everything," he now believes. "It's just not feasible."

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Austin CD Limits

Many in Austin would argue that Waterloo Records carries everything and that doing so remains a feasible concept for a music store. Chief among them would be Waterloo owner John Kunz, who appreciates the specialty market, or markets, his store serves.

"I think we answer niche needs in many respects," says Kunz, adding that his store has been a trailblazer in terms of offering a wide selection of Texas-based artists. There's little doubt that every Austin artist with an album tries to get it distributed at Waterloo.

Kunz would also like to think that his helpful employees and his exclusive release deals, including limited-edition releases by the likes of Marcia Ball, Alejandro Escovedo, and the Jayhawks, add to the appeal. A testament to these factors is the way Waterloo has survived the potential headache of heavy construction on Lamar Boulevard in front of the store.

Kunz and his team have also planned strategic events to help drive customers to their store despite the extra labor involved navigating through roadwork. Primarily, customers are being offered more in-store performances. This is a staple in any town, though with the evaporation of Sound Exchange, Tower, and Thirty Three Degrees, options for in-store locations have become scarce.

"It's something that, unfortunately, will be lost with the old days of record stores," posits Jupiter's Jason Enright.

Jupiter was a popular destination for in-store gigs, with one show by local pop/rock band Fastball yielding a live album. With the Tower closure, Waterloo becomes the primary location to find artist appearances and performances. The field is crowded, though, and Kunz feels that Waterloo is "dedicating as much time to in-stores as we can already."

Landing an in-store at Waterloo is not as easy as one might think, making it even more competitive for independent artists. Acts are responsible for covering some of the costs for marketing an in-store performance. This includes an ad in the Chronicle (which is mandatory) and a banner outside the store (which is not), totaling several hundred dollars. Could an act have an in-store at Waterloo without paying for the marketing expenses?

"Without all of that stuff, it would not be very successful," Kunz summarizes.

"I beg for them, and I can't get them," claims Encore's Chuck Lokey about his attempts at attracting more in-stores to his shop.

"We've always wanted to do more in-stores, but we don't have the employee power to pull it off," says Jason Shields, owner of Cheapo Discs, which is holding strong just down the street from Waterloo.

While Cheapo doesn't require a marketing budget for in-stores and Waterloo does, the latter store is well-known in the music industry for going out of its way to support local musicians and help them release their material. Kunz and Marketing Director Noelle Pike routinely work out the best release strategy for Lone Star State musicians, and this includes complimentary placement on the popular "Texas Artist New Release Wall."

Nevertheless, the outlets at which consumers can find local music are still disappearing. As the Enright brothers and others point out, perhaps consumers will just have to look elsewhere for their entertainment.

"It forces you to think of a different way to get the music in front of people," says Chad Beck, music producer for the fledgling Austin-based record label Aspyr. Aspyr recently utilized professional ties with Apple to make its entire catalog available via iTunes.

This is particularly troublesome for chains like Tower, which offers sales through its official Web site (www.towerrecords.com) just as it does at its retail outlets. In the age of Amazon.com, it becomes easier to shop at Tower without ever visiting a Tower. Dave Mulholland still laments the fact that customers won't be able to visit the cavernous building for future impromptu shows.

"This was a great place to have in-stores because it was a great-sounding room, and you could pack the place full of people," he says of the former movie theatre, which also didn't charge for in-stores. They were generally less well-attended than those at Waterloo.

An album that sold briskly during the last days of Austin's Tower location was a major-label release from Irish rock band the Thrills, titled Live From South by Southwest. The live EP was recorded at the band's Austin in-store performance during SXSW 04 in March. Ironically, the Tower location at which the album was recorded will no longer sell it because the location no longer exists. The disc proved a sentimental tribute for the store.

"They rushed to get that out, because we were worried it wasn't going to come out in time and we weren't going to be able to sell it," Mulholland admits.

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Tower of Power

"[The Thrills EP] had everything to do with timing," says Tower's executive vice-president of sales & merchandise, Kevin Cassidy, from his office at the chain's corporate headquarters in Sacramento, Calif. "It really had nothing to do with the closure of the store."

According to Cassidy, Tower had given serious thought to closing the Austin store starting in January. It wasn't something the company was happy about doing, and Cassidy says Tower "exhausted every kind of thought" about the Austin market. The culprit? College students, who increasingly are not finding their music at retail stores.

"It follows what's happened in many of the college markets we've been in," he continues. "It falls in with the college market, overall."

Around the same time the decision came to close the Austin location, Tower also announced the closing of a store near another major university with a huge music scene: UC Berkeley. More and more, today's record store owners and managers are fearing a generation of music fans who don't want to own albums.

"Like most college towns, particularly in this case, students do not purchase the way they used to purchase," Cassidy explains.

On the final day at Tower Records in Austin, 19-year-old UT student Christina Chianis visited the store after never having purchased anything there in the past. "I haven't bought a CD in years," she admits, preferring to get her new music from legal online sources.

When asked about the rare occasion she wants an actual album, outlets like Best Buy are her main source. Meanwhile, after spending a few minutes shopping through the last hours of Tower, Chianis exited the store without purchasing an album. Instead, she bought a pack of blank CDs.

"It's not as if we've given up on Austin as a market," Cassidy is quick to point out. While the chain's Dallas outlet will now be the only Texas store of the 90 nationwide locations, Cassidy is hopeful another Tower will come back to Austin. If that happens, he stresses it will not be near the UT campus.

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And Another One Gone

On the final day of Austin's Tower, the employees are giving it their best to the very end. With only 10 minutes left before the doors are locked, one clerk decides to dedicate a final song to customers of the store. Fittingly, that song is Queen's "Another One Bites the Dust." It lends a humorous tone to the otherwise depressing scene.

Not surprisingly, there's nothing humorous about manager Dave Mulholland during those final moments. The store's captain stations himself by the door, thanking customers as they leave with their purchases. Mulholland's tone is both grateful and grief-stricken.

After the store officially hits closing time, a man in his 20s sneaks through the door, ready to take advantage of the store's 30% clearance sale. Mulholland stops him, telling him that the store is closed.

"Will everything be 30% off tomorrow?" asks the man.

"No, this is it. We're closed," Mulholland strains to announce.

"What?!" the customer shouts, enraged and emotional. "That's not cool at all!"

After sharing his regret and frustration, the final would-be customer at Tower Records leaves. He can't buy what he came for because the store needs to get empty soon. Everything must go.