High street music to the ears of home entertainment retailer

Half a century ago when Golden Discs emerged amidst the 1960s musical revolution, vinyl was the norm, cassettes were years from their commercial debut and it would be decades before the internet shook up the world of home entertainment.

Everything has changed and nothing has changed, insists chief executive Stephen Fitzgerald who maintains the business's recent aggressive growth strategy is underscored today by the same core values it championed all those years ago.

In a world where the music and home entertainment industry struggles to define its space, this conviction is exemplary of a company with a sense of purpose.

The internet, and its online shopping sites, is "like a very big shop with a very small shop window", says Fitzgerald, swatting away the e-threat that helped bring down a giant in HMV.

The future is a little bit of everything.

“I think there is room for both [online and retail]. Some people will download; some people will stream; some people want to buy physical product,” he says.

“There is still a huge demand for physical products in music. If anything I think the market is underserved at the moment. A CD is better quality than a download. Also, people like to come in and browse and make an impulse purchase.”

After all, before one gets too sentimental about the death of the high street, Fitzgerald points out that the CD and DVD market is still worth in excess of €100 million in Ireland.

“As long as we can take a decent market share of that and control our costs we will have a viable business model.”

Golden Discs, having entered examinership just over four years ago, is an unlikely beacon of hope but it appears to see itself as just that.

Its core values of customer service and value for money are what it says will drive it through these difficult times, framed as they are by a sliding economy and an infatuation with online shopping.

Early days
It is a long time since the first store opened in 1962 on Tara Street in Dublin, followed soon after by Liffey and Duke Street branches and finally going nationwide in the 1970s.

“Obviously the 1980s was a growth period for tapes and records. I suppose the zenith for the company was in the nineties with CDs,” says Fitzgerald.

At its peak there were 39 stores and “multiples” of its current 100 or so staff.

Then came the perfect retail storm – a noxious mix of rocketing commercial rents (150 per cent in this case), economic chaos and online competition.

In 2009 Golden Discs entered examinership and a period of restructuring but ultimately came out the other side, reinvigorated.

“Examinership had a bad name over recent years but Golden Discs has long been exemplified as a successful one.”

Fitzgerald, who began in the company in 2000, working his way up through a number of roles before taking over, has recently presided over a number of new shop openings in Dublin – Swords and Blanchardstown – and in Cork, where the company has gone against form and opened a substantially sized branch.

Doesn't the decline of Virgin and HMV worry him?

“They have been a very formidable opponent for a very long time, I think maybe a quarter of a century. It certainly created opportunity if you are the last man standing. The market is still there but there is really only room for one,” he says.

“We are in growth mode at the moment but obviously there are more favourable market conditions out there now. We are able to talk to landlords now and get more favourable rates. We are working on hopefully getting another three over the next few months.”

There has also been product improvement, Fitzgerald believes, with music and movie standards of late being so much stronger.

“Every week there is a new, really good album and really good DVD products.” Good product, excellent staff, increasing square footage, a dearth of competition, and favourable rental conditions. It seems the perfect storm has broken into the perfect evening of this retailer’s story so far.

And what for the future? Well, Golden Discs has a download store with 10 million songs that it is looking to expand, possibly with a view to adding movie content.

It is also about to launch an Amazon-like “physical fulfilment” facility – essentially shipping CDs from online orders.

Some of the 15 shops have also dipped their toe into merchandise – a few t-shirts, that kind of thing.

But says Fitzgerald, there will be “no paradigm shift. We are not about to start selling shoes and handbags.” Some things, then, will never change.