CD shop chain filing for bankruptcy after succumbing to rising rents and poor business
By Shuli Sudderuddin
It has been a mainstay in the music retail industry here for more than 20 years, but Sembawang Music Centre will soon sing its swansong.
The plug is being pulled after the CD shop chain succumbed to rising rents and poor business.
Said owner and founder Dave Boo, 56: ‘We’ve liquidated the company and are filing for bankruptcy. Right now, all our energy is on clearing our stock and making as many sales as we can.’
He declined to say how much he owes creditors, adding only that it is very little.
Sembawang’s three outlets at Raffles City, Thomson Plaza and Plaza Singapura are holding sales touting 75 per cent savings.
The outlet at Plaza Singapura will be the last to close, in a few weeks’ time.
Mr Boo started the company in 1986 at age 33 as he was an avid music lover.
It was a small record store in Sembawang, patronised largely by soldiers from New Zealand who were stationed nearby.
Over time, the business grew. In 2004, Sembawang Music Centre was Singapore’s largest music retail chain, generating about $20 million in turnover.
That year, it became a listed company.
At its peak, it had 24 outlets.
Looking back, Mr Boo said: ‘We expanded too fast. In about 2005 or 2006, I bought the business back from the oil and gas company which owned it.’
The oil and gas firm had offered money for expansion and became a shareholder.
‘I started shutting down the outlets that were not doing so well,’ said Mr Boo after he regained control.
The strategy was not enough to save the chain.
‘Rents were too high. In Sembawang, I used to pay $4,000 to $6,000 for a 1,000 sq ft shop. For a 600 sq ft place in Raffles City, I now pay about $10,000 to $12,000 a month,’ he said.
And the industry is declining.
In April, The Sunday Times reported that sales at Sembawang Music Centre had shrunk by about 20 per cent every year since 2003.
Another music retailer, HMV, is moving to a smaller 12,000 sq ft store at 313@Somerset from its current 17,000 sq ft space at The Heeren.
Music giant Tower Records closed in 2006, leaving other brands like Gramophone and That CD Shop to fight for market share.
‘There are so many formats of media available now. People can just download music and movies and they don’t have to buy them any more. We couldn’t survive like that,’ Mr Boo said.
However, he credits his staff for maintaining their fighting spirit to the very end.
He said wistfully: ‘Right now, we are trying to sell all we can. I can’t think of anything beyond this, but once the last shop closes, hopefully someone will hire me as an employee.’
Certainly, buyers like Mr Daniel Ong, 29, a research scientist, will miss Sembawang.
‘I find that it’s cheaper than the bigger chains and it also carries more Chinese and Japanese music than other stores,’ he said.
‘There are so many formats of media available now. People can just download music and movies and they don’t have to buy them any more. We couldn’t survive like that.’
MR DAVE BOO, owner and founder of Sembawang Music Centre