Chris Hart says he'd be here another 28 years if he could find a partner with some capital. Photo / Martin Sykes
Legendary music store Real Groovy and its entire collection of associated businesses are up for sale.
Managing director Chris Hart told the Weekend Herald yesterday a bad foreign exchange deal had left the 28-year-old business in need of capital. With his business partners wanting to pursue other interests,
he had no option but to offer the entire business for sale.
"Essentially, what we're doing is getting the widest possible interest by going public."
Mr Hart was unable to confirm whether Real Groovy would look and operate the same after a sale. That would depend on the buyer, he said.
"I don't have a crystal ball. My personal preference is not to sell at all, and if I could find a business partner with some capital, I'd be here another 28 years."
Finance company collapses had not affected the business, and Real Groovy stores' sales were substantially higher than those of the Sounds music store chain, which shut in November last year after its parent company collapsed owing almost $20 million.
Mr Hart said the emergence of JB Hi Fi into the New Zealand music sales landscape had brought a price war between it and The Warehouse - with both chains often selling music for cheaper than Real Groovy could buy it.
But neither that, nor ever-increasing online music downloads, had forced him to offer Real Groovy for sale.
"New sales are only 28 per cent of our business, so it's not like it's a major component. We do a huge amount of second-hand sales. That's really the core part of the business. That's how Real Groovy started, and it's also responsible for giving Real Groovy the strength that it's got. Because we can't really compete on price."
Their only real competition in second-hand sales, Trade Me, managed to complete just one in five sales, Mr Hart said.
"But with us, unless they're damaged, or they're by Paul Holmes, we'll take anything."
New Zealanders knew that, still made use of it, and the business was in a strong position accordingly, Mr Hart said.
"There's nothing wrong with the business itself. We're still turning over a considerable amount."
Branching out from the long-held Queen St site to Wellington,Christchurch and Dunedin hadalso been successful, he said,with the new stores - in particular Wellington - "holding their own" financially.
But costs had increased. Rent on the 2415 sq m Queen St property had risen 100 per cent in the past five years.
