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The Walrus
The Walrus
Lifestyle
Richard Trapunski

Why Sunrise Records Is Still Spinning

Brandon Celi

The only way into Cloverdale Mall is through a parking lot. Here, in the Toronto suburb of Etobicoke, the world of retail is languid and sprawling, with a noticeably older demographic than in its downtown equivalents. A walk through the one-storey mall will take you past discount clothing outlets and an all but forgotten bookstore chain. Around a corner, past a Chinese food stall called Pick ‘N’ Chus, is a familiar red and black sign: SUNRISE.

A series of mostly unadorned shelves are packed with DVDs, vinyl records, and CDs organized by genre: punk, metal, jazz, blues, and hip hop. Near the front is a slogan: “Canada’s Record Store.”

A similar Sunrise Records once sat on Yonge Street, right in the heart of the city. The homegrown retail chain was part of a string of major record stores such as Sam the Record Man and HMV Canada, plus independents such as Play De Record. Those shops all disappeared from Yonge over the past few decades, along with the other big Canadian chains Music World and A&A, pushed out by major shifts in how music is distributed and consumed: digitally—on file-sharing sites such as Napster, on iTunes Store, and eventually on streaming giants like Spotify and Apple Music—or ordered for delivery online. But Sunrise, first launched in 1977, is still around, though it no longer has a home in downtown Toronto. “I’ve had people telling me that record stores are closing for probably ten or fifteen years now,” says Robert Lawson, the store manager at the Cloverdale location for much of its twenty-year history. “Well, we’re still here, and I’m still here. So I think, as long as they’re still making CDs and making records, there will still be room for record stores.”

There have been trend pieces about the resurgence of vinyl for at least a decade now. The conversation around record stores tends to revolve around boutique brick-and-mortar, independent, and often urban one-offs frequented by collectors and people in bands keeping the High Fidelity–style cooler-than-you music snob dream alive. They’re positioned as the fetishistic alternative to Big Streaming, a place for music lovers to buy music they can hold in their hands.

But what about the middle category, the unpretentious outposts in malls selling big releases from huge pop stars like Taylor Swift and classic rock reissues from bands like the Beatles? Sunrise is proving there’s still space for them. A lot of space, actually.

Sunrise, it should be said, was nearly swept away as well. After it closed its flagship location on Yonge in 2014, it was purchased by a then thirty-year-old businessman named Doug Putman. A music fan, Putman still saw life in the chain. In 2017, he expanded operations across Canada. That was the year Sunrise’s one-time rival HMV Canada entered receivership and announced its plan to close its stores across the country. Putman swooped in and bought leases for seventy of those HMV outposts, all of them in malls, and converted them to Sunrise Records. In articles announcing the move, many journalists and industry sources insisted it was a doomed strategy. One story from CBC News quoted two indie record store owners who called it far-fetched and “insane.” Now, the chain that formerly had a handful of shops in Ontario has eighty-five locations throughout the country. Roughly 500 employees staff Sunrise today.

“I think there’s a bunch of people who still think it’s crazy, who probably don’t understand it,” says Putman over the phone from his office. He’s based in the Hamilton, Ontario, suburb of Ancaster. “But you can’t make everyone see what you see. And it’s probably a good thing not everyone saw what I saw, otherwise I wouldn’t have been able to buy it.”

The music industry has been disrupted and disrupted again: from home taping to peer-to-peer file sharing to streaming. But people keep buying tickets to concerts, and they keep shopping for records. There are still many listeners looking for the older ways of music consumption, even among the generation that lives on TikTok. According to Luminate’s 2022 year-end music report for Canada, Gen Z listeners are 82 percent more likely than the average music listener to be vinyl buyers.

Barbie Bullock is the Ontario district manager for Sunrise and a former manager of several locations. She says that retailers have to adapt but also argues they can’t lose sight of the core business: the entertainment itself. When Putman acquired the HMV leases, staff were given the opportunity to stay on under Sunrise, and Bullock was one of them. The reason Sunrise has thrived where HMV failed, she says, is that HMV lost track of its core product, focusing more on housewares, blankets, and other lifestyle products (a lesson bookstore chain Indigo is also now learning). Records are hardly the only thing for sale at Sunrise. There are toys and posters, T-shirts and collectibles galore. But albums and, more broadly, physical media and entertainment products are the centrepiece of the business.

“HMV didn’t think that vinyl was going to make a comeback,” Bullock says. “And by the time they realized it was coming back, it was too late, sadly.”

While much of the vinyl revival conversation has revolved around a return to the warm crackle of classic records by bands like Pink Floyd and Fleetwood Mac, what’s often lost is that it’s not being driven by older listeners alone. Lawson estimates that half the vinyl he sells are to buyers under forty-five. In fact, many of Sunrise’s popular sellers are from active musicians like Olivia Rodrigo and the day’s most popular pop stars from South Korea. All are artists with intense fandoms that are captive audiences for special editions or collectibles—even (or especially) in multiple versions. According to a 2022 Luminate report, half of the Americans who bought vinyl over the past year didn’t even own a record player.

Swift, especially, is testing how many times a listener will buy the same record. She’s been re-recording and re-releasing all her old albums as “Taylor’s Versions” while also putting out new material. Her brand new album, Midnights, was Canada’s number one vinyl seller in 2022, according to Luminate, and was available in over twenty versions across cassette, vinyl, and CD, featuring different colours and album art, clean and explicit versions, and autographed and plain versions. Sunrise has offered special editions from artists ranging from Swift to the Rolling Stones to K-pop groups like Seventeen. This makes marketers out of community-seeking Gen Z listeners, who share their excitement with unboxing videos on TikTok.

But it’s not all Gen X stalwarts and Gen Z adopters. Despite streaming, CDs are still very much alive, says Lawson. According to Luminate’s 2022 data, an average of 31 percent of music listeners in the surveyed Canadian and American markets play CDs. At Cloverdale, they’re the number one seller. Some are sold to older listeners who never fully made the switch to streaming; some are sold to completists who need a physical copy of every Drake or Kanye West album; others are younger listeners who see them as retro novelties their parents used to listen to. K-pop girl group Red Velvet even put out a collection of releases on mini CDs.

Also notable is the variance from store to store. Bullock says K-pop doesn’t do as well in the Windsor, Ontario, branch, but St. Catharines can hardly keep it in stock. Meanwhile, Scarborough loves vinyl. Operating eighty-five stores throughout the country means the Sunrise chain brings “buying power” and economies of scale, says Putman, but stock is also tailored to each individual store. There’s a team of retail analysts that studies the demographics of each store, which format does well, and which artists are big sellers. That determines which albums, and which exclusives, go where.

That’s a change from the days before Putman. Lawson remembers many stores stocking multiple copies of certain albums just because someone at the store liked them. There’s a lot more strategy behind it now. Lawson prides himself on product knowledge, getting to know customers’ tastes to recommend something they might want to listen to. He’s even written listener’s guides about the Guess Who, Cheap Trick, and Nazareth. But he says he’s learned as much from his customers, getting from them a crash course in K-pop. “A lot of them have been shopping here since it opened,” he says. “Then there’s people who came here when they were twelve or thirteen years old and now they’re in their mid-twenties and they work here.”

Some might not necessarily expect that level of community in a suburban mall, but the mall-based model appears to work for Sunrise. Things are changing quickly in Canada, though. Cloverdale is slated for a massive redevelopment, shifting to a mix of residential and retail. Similar things are happening at malls across Canada, including Yorkdale Shopping Centre and Scarborough Town Centre. Will Sunrise still have a home in Cloverdale? Lawson thinks so. Either way, Sunrise may need to adapt again.

For the man who bought the chain, the key is to get into the stores to listen to the customers themselves. “If we’re doing our job right,” Putman says, “then I think we’ve got a business that’s going to last a long time.”

Putman is known for taking a well-known brick-and-mortar retailer that’s been disrupted or devalued and turning it around. He purchased Toys R Us and expanded it. He mass-bought leases of DavidsTea, which was closing stores amid a COVID-19 pandemic struggle, and used them to launch a business called T. Kettle. Recently, he did the same with Bed Bath & Beyond, erecting from its ashes a new home furnishings chain called rooms + spaces. Often the strategy involves renegotiating better leases with landlords (many malls are struggling to keep tenants) and paying more attention to what each store stocks.

Putman also bought the American chain FYE (short for For Your Entertainment), a pop culture store that is heavy on Funko Pops (large-headed figures of everyone from Marvel heroes to rock stars like Jimi Hendrix) and other collectibles in addition to music and movies. There are hundreds of FYE stores throughout the US, and they’re testing the concept in a few spots in Canada, including the CF Toronto Eaton Centre.

And in 2019, two years after his acquisition and transformation of HMV storefronts in Canada, Putman bought the chain in the UK, which had gone into administration. In 2022, the 101-year-old company made millions of pounds in revenue and recently made a big splash by announcing the reopening of its iconic London flagship on Oxford Street. Today, HMV UK has about 1,000 employees and 119 stores.

In England, the strategy with HMV is different, Putman says. There, the focus is on standalone or, in British parlance, high-street stores. Putman says the locations can generate a fair amount of business thanks in part to greater population density and transit access, though some high streets are undergoing a period of decline.

Putman says he enjoys the challenge of turning around a distressed business. “I just think they’re a lot more fun than buying a business that’s just doing well.” The businesses he buys still have potential, he says, but they’re not being run correctly. “Yes, I want to make money. I don’t think there’s anything wrong or shameful about it. I do business to make money,” he says. “So maybe I can sell this business, but I would rather have the business than the money. I love the businesses that I own.”

He’s not interested in the private equity approach of buying up and consolidating struggling assets to sell them at a profit, a practice that’s sometimes described as vulture capitalism. It typically involves finding businesses that are struggling and near death, then scooping them up at a discount. They cut long-term investments to increase short-term profits, grow quickly, increase stock prices, and then sell for a big profit later. Since many of these are public companies, the goal is to increase value for shareholders, not to build a business or a good working environment for the workers.

The exact profit and sales numbers of Sunrise Records aren’t public knowledge, and a representative from Sunrise declined to share any financial information. When it comes to the success of this approach, you have to take Putman’s word for it. So far, he’s never sold any of the businesses he’s acquired.

Retail analyst and author Bruce Winder says he’s been watching Putman’s approach through his various chains and appreciates the way he’s able to operate in niches that others have abandoned. The death of brick and mortar has been overhyped, he says. What’s struggling is the model of behemoth department stores that sell a little bit of everything. But people are still shopping in person at stores that specialize.

“He’s got the market cornered,” says Winder, referring to multi-store record store chains, “because everyone else left that area. Everyone ran for the hills.”

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