Amoeba Music stores in financial difficulties

[duaneiac]

I fear this will be the case for a lot of stores.  From sfgate.com --

On the Monday that Amoeba shuttered for the foreseeable future, all three of their record shops had collectively generated about a third of the sales they normally make in a day. Now, as the duration of the closure creeps past a month, San Francisco manager Tony Green says there’s very little money coming in — and the bills aren’t going away."

“It’s been tough going for all three stores, and COVID-19 has taken our condition from serious to critical,” he said.

The current crisis certainly isn’t the first faced by Amoeba, which has endured countless hurdles from the recession to the rise of the Internet and the shift to digital listening formats. Green said there’s infrastructure in place to keep things going if the store is able to re-open in May, per Gov. Gavin Newsom’s current shelter-in-place orders.

And if not?

“We don’t know that we can weather the COVID-19 storm,” reads Amoeba’s GoFundMe campaign. “With no way to generate income, our savings are running out, with bills and rent coming due, and with a primary commitment to our staff, who we are trying to keep as healthy and financially sound as possible.”

https://www.sfgate.com/coronavirus/article/Facing-an-uncertain-future-Amoeba-Music-launches-15214265.php#photo-19320719

[jcam_44]

This is tough to hear but i, like you would expect many stores to be in trouble. If Amoeba only had enough savings to keep afloat for a month, I'm sure smaller outfits are in much dire straits.

[clifford_thornton]

yeah, it's too bad but they've also had some very strange business models over the years. Remember that big digital music service they were trying to roll out that took files from all their used LPs, without paying anyone? They sunk a ton of money into that thing before it became painfully obvious that it wouldn't work out. or their pivot to a dispensary? Totally confusing store/brand, seems like they've been struggling to figure shit out for at least a decade now.

[felser]

11 hours ago, clifford_thornton said:

seems like they've been struggling to figure shit out for at least a decade now.

They're hardly alone in that,  though those are some strange moves they made.

[catesta]

It sounds like these guys are just not good businessmen. They sold a building in 2015 for around $34 million.The story I read suggested the proceeds of that sale which was a "great deal" were used to pay off old debts.

Now, they are moving forward with construction plans on a new building. At the same time, they're in need of a go fund me campaign? If they were able to get a construction loan, that suggests assets beyond living month to month and the flip side is, if they're not using a lender they have the cash on hand to build.

[duaneiac]

I've only been to the Berkeley and SF stores, but unless their Hollywood store is the size of an aircraft carrier, I don't see why just three locations should have over 400 employees (as the article states).  Seems like some prudent pruning needs to be done in that area.

[catesta]

Good point. Yeah, I seriously doubt they employ anywhere near that many. The $400k from gofundme would only be enough to cover a little more than a week of payroll.

40 full time employees would seem more realistic.

[clifford_thornton]

1 hour ago, catesta said:

It sounds like these guys are just not good businessmen. They sold a building in 2015 for around $34 million.The story I read suggested the proceeds of that sale which was a "great deal" were used to pay off old debts.

Now, they are moving forward with construction plans on a new building. At the same time, they're in need of a go fund me campaign? If they were able to get a construction loan, that suggests assets beyond living month to month and the flip side is, if they're not using a lender they have the cash on hand to build.

100% agree. It's all very strange to me.

[JSngry]

This is what evolution looks like in real time, maybe?

[felser]

47 minutes ago, JSngry said:

This is what evolution looks like in real time, maybe?

Survival of the fittest.  Darwin is smiling.

[Adam]

The Hollywood store has generally 7-10 registers working at any time, another 3-5 people at the desk for buying used material, 2 people at the info desk, people in every department (2 in the back room with with jazz, blues, etc; 1 in foreign releases, another in rock.  A bag checker at the front door, and a security guard, and someone monitoring parking.  Oh, and another 3 or 4 people upstairs in DVDs.  That's probably 30 people working there at any given time.  60 per day.  Open 7 days, probably two shifts of people per day since they are open 12 hours or more.  Probably no one works more than 5 days per week, so you basically have to double that shift.  That's 120.  Probably the same in Berkeley and SF.

Then there is an online store.  Who knows where that does packing & shipping?

So I think 400 is easily achieved, and to maintain their volume, and treating workers decently, and not pay overtime, I'd say 400 workers seems about right, and difficult to reduce without reducing store size.  You could probably close a register or two, but things go quite smoothly when shopping there, and there are a lot of people who can help you.  

I know that there is a general notion that everyone in America is supposed to work endless hours for limited wages, but that's really not the best way to construct a society.

[catesta]

Multiple shifts would indicate paying most on a part time basis, which is a way of avoiding overtime and other benefits. The owners like to say 80% of their employees are full time, of course only if you base it on 32 hours per week.

Overtime in California is time and a half based on exceeding 8 hours, which is pretty generous. I'm sure most employees wouldn't mind picking up a few extra hours per week at time and a half. So while you are patting them on the back for being so good to the society, you are also laying out just how they avoid paying their people more money.

Isn't Amoeba one of those companies that passes on a surcharge to customers to go towards off setting minimum wage requirements?

I read an interview with Mark Weinstein and he confirmed they have furloughed all employees (no pay), except maybe a few working online orders.

They seem most interested in constructing a new store more so than a society.

[JSngry]

Ultimately, follow the money, right? Not just in, but out. And not the paper trail, but the actual money.

[jcam_44]

A couple things I know about Amoeba, at least here in SoCal. Their employees really love the owners, and what they do. They also employ or used to employ a lot of artists. I have a friend who plays bass for a few bands and they would really worked with his schedule when he worked there. Pretty sure he still goes to their christmas party and he hasn't worked there in a few years. I also contend it's not the same place it used to be, but they do have a ton more competition than they used to. And the Hollywood location is packed on the weekends, it's actually impressive they have so much stock with so many people buying stuff. I've been there when every register is open and there is still a line. That's 10-12 registers open still backed up.

The dispensary thing makes sense to me if you can make it a profitable component of your store. Probably make more on weed than on their giant classical section (the rumor was it was going there in the old location). My old buddy Lee at New Life Records in Nashville told me back in  2006 or so the only thing keeping him afloat was his pipes and bongs he sold. He just loved music and wanted to keep the shop.

 The new location i think is going to be a lot smaller. And they aren't constructing the building, I'm pretty sure they are leasing (i don't think they bought it) a location but are trying to get the store set up the way they want. It's a store front in a building with other retail space. The old spot was only them. Honestly the new location is kinda shitty parking wise based on my limited time there. If you knew about the two hour validation at the old spot across the street it made it super easy, especially on the weekends.

 

 

 

[jcam_44]

Sunset location is closed for good. Sad day. 

[catesta]

11 minutes ago, jcam_44 said:

Sunset location is closed for good. Sad day. 

Wasn't that always the plan? Sure, they can't re-open to do a final sale and all but they were already moving.

[jcam_44]

4 minutes ago, catesta said:

Wasn't that always the plan? Sure, they can't re-open to do a final sale and all but they were already moving.

Yes it was but it is sad to never get to set foot in there again. That building was special. Apparently they had a lot of things planned to say goodbye to the location as well. Concerts and the such

[catesta]

I can't deny, not being able to do a proper send off, does suck.

Edited April 30, 2020 by catesta