Due to a change in consumer behaviors and the downturn in the economy, a local record store company that has been in business for 30 years, recently filed for bankruptcy in the hopes of being able to reorganize debts and remain open.
Plan 9 Music filed for a business bankruptcy on Monday, and cited having between $1 million and $10 million in liabilities, but only $50,000 in assets. The owner of the record store company said that his business was already struggling with more people buying music online, but then when the economy turned in 2007, the financial problems were really compounded.
The owner's hope is that by filing for Chapter 11, the company will be given the necessary time to restructure debts and stay in business. He is also hopeful that the company will be able to move to a nearby smaller location with more affordable rent.
Plan 9 Music first opened in 1981, and at one point included seven stores. However, since 2009, the company has closed five of those seven stores, and has had to lay off approximately 20 people.
One marketing university professor said that with changing consumer behaviors, record stores have lost their buyers as more and more people just purchase what they want -- either an entire album or just a few songs -- online, and download it all directly onto their iPods and other MP3 players. For many consumers this takes away the need for a record store.
However, the owner is not giving up hope, and said that even though filing for bankruptcy was not his first choice, it was what he had to do in hopes of staying in business.
Source: Richmond Times-Dispatch, "Plan 9 Music files for bankruptcy," Louis Llovio, Oct. 19, 2011