By Karyn Scherer
The collapse of Auckland music chain Truetone Records has left some customers worried they could be holding worthless gift vouchers.
Two weeks after being placed in receivership, the struggling chain has found a new owner. But the situation for people with music vouchers bearing the Truetone name is still
unclear.
The receivers of Tru Tone Ltd, PricewaterhouseCoopers, could not be contacted for comment yesterday. However, the new owners of the business say they hope to strike a deal with customers.
The chain, owned by Gary and Alison Nuttall, was sold at the weekend to a major competitor, Sounds, which will take control of the chain this Friday.
Sounds' managing director, Sean Coleman, said it was difficult to sort out the issue when he did not know how many vouchers were outstanding.
"We're at the moment working out what our policy will be on it, because we won't get reimbursed by the receiver. But I hate the idea of people being out of pocket. Any time any sort of chain goes under these days, the people who are the most affected are the customers, and it's no fault of theirs."
Sounds outbid ECM Music for the chain, but has agreed to sell two of the eight stores, in the St Lukes and West City shopping malls, to ECM. The deal will give ECM 10 stores in Auckland, as well as a new store it plans to open in Wellington next month.
Sounds is likely to rebrand the rest of the stores, in Manukau, Newmarket (2), Pakuranga, Papakura and Shore City to either Sounds or Tower Music, which it also owns. It is also considering a new brand in malls where it already has a Sounds store.
Mr Coleman said it planned to keep all the stores open, subject to negotiations over rent.
The deal will give it nearly 50 outlets across the country, including eight franchised stores, cementing its position as New Zealand's largest music retailer, with around a third of the $160 million music market.
The Warehouse is believed to have snared around a quarter of the market, with ECM and the CD Store on about 8 per cent each.
Mr Coleman said he was unconcerned that the market appeared to have plateaued over the past year. Nor was he worried about the threat posed by the internet.
"I think it will put a dent in retail that hasn't embraced it. But I actually think it's going to help...We're embracing it wholeheartedly and in about three months we'll be announcing a major website."
