L.A. Times — ‘A grinding halt’: Record stores struggle to stay afloat amid coronavirus crisis

Discussion in 'Music, Movie and Hardware Store Guide' started by steelydanguy, Mar 29, 2020.

  1. eddiel

    eddiel Forum Resident

    Location:
    Toronto, Canada
    Still $34M...couldn't have had that much bank debt if they still have enough to buy land and build on it. Unless they are financing a lot of it. In which case I have even more questions :)
     
  2. I could be wrong, but I don't think they are building their new digs, leasing it at El Centro:

    Luxury Apartments in Hollywood, CA for Rent | El Centro

    ” Amoeba Music’s co-founders Dave Prinz and Marc Weinstein sold the building to developers in 2015 for $34 million.

    Will a Lawsuit Stop Amoeba Music from Becoming a MassiveApartment Building?
     
  3. Amoeba Founder on GoFundMe: ‘We’re Trying to Keep the Culture Alive’ – Variety

    We get haunted by that number because it gives such a wrong impression. Basically, we owed almost that much when we sold it. Honestly, we netted something like $7-8 million altogether when we sold the building, and most of that went to operating costs over the years. It wasn’t money that we were able to pocket. When that happened, we were just trying to stay alive. We’d kept going further and further in the hole ever since the last recession, and we lost all of our equity and all of our backup, which culminated in that sale. I don’t want to sound defensive about it, but it creates a terrible, wrong impression for us that is so not the case. (The three other partners) and I ended up with not much. … We’re not a cooperative, but we spread the money around every which way. All the managers at the stores are part-owners. And we have done everything we could to stay alive.

    We’re not in a position to retire. Even more than that, our main cause is to keep this thing going, at whatever cost. Honestly, it’s always been our mission since day one is to do this. We care about music more than anything and we care about musicians. And it’s hard for most people to understand that we could be quite that idealistic. But I live in a rented house, and I’m not rich, at all. I’m just a freaky artist guy with not a lot of money, but a lot of records.



    Which probably means they took out loans against the value of the building (way before the building's sale) , because : (1) some of the owners may have wanted to tap the value; (2) they needed the money for operating costs because the business may not be covering it.
     
    SJP likes this.
  4. cdash99

    cdash99 Forum Resident

    Location:
    Mass
    In which case, they wouldn’t be the first business owner to run a marginally profitable enterprise while building up value in the underlying real estate.
     
  5. Chee

    Chee Forum Resident

    Location:
    Denver
    $34 sale and 7.5 net. These guys must joking. Operating expenses? They'd break even on the amount coming in. "We are not in a position to retire". 7.5 split to guys already loaded with million dollar+ paid for houses and big bank accounts. Think of the "We are not in a position to retire" small store owners. They are prepping the leaf operation. That's gonna be huge.
     
  6. cdash99

    cdash99 Forum Resident

    Location:
    Mass
    And you know this, how?
     
    drpep likes this.
  7. eddiel

    eddiel Forum Resident

    Location:
    Toronto, Canada
    The article above has the 7-8M net figure quoted from one of the owners. Not sure of anything else but that's where he got the net figure.
     
  8. eddiel

    eddiel Forum Resident

    Location:
    Toronto, Canada
    I hope that net figure of $7-8M is after tax. Even if that net figure is after tax, it really isn't retirement money unless these guys are close to being dead and they really do have million dollar homes and big bank accounts!

    I'm hitting half a century soon and I would love a couple of mill in my bank account but retirement money it is not. Would make life much easier though :D
     
  9. eddiel

    eddiel Forum Resident

    Location:
    Toronto, Canada
    Yeah it's a huge debt figure and those two points make sense. I can't see them taping into the value for op costs up to $26M though. That's absolutely astronomical figure for a store of this type. It has to be a combination of 1, 2 and possibly a large mortgage from the original purchase. Not sure how they were there or when they bought it.

    As to your previous post, you are correct they are leasing their new location not building.

    They hit 65% of their Go Fund Me goal though.
     
    Shawn and zphage like this.
  10. cdash99

    cdash99 Forum Resident

    Location:
    Mass
    Depending on how old the owners are, 7.5-8 million is a great nest egg, but enough to retire on, especially in an expensive area such as California. Then add in the possibility of having a couple of kids to put through school. It goes quick.
     
  11. You must live a pretty lavish lifestyle if $7.5-$8 million isn't enough to retire on! And whether you'd in Kansas or California the cost of a TV etc. is the same. Housing is a different story, but if you already own a house you're set - property taxes in CA are pretty low.
     
  12. eddiel

    eddiel Forum Resident

    Location:
    Toronto, Canada
    I think there are 4 partners though so it's 25% of that. In addition in the article above they mention that managers have some sort of ownership stake as well, probably a token share % of some sort so they'd get a bit of that as well assuming that's the set up.

    Still I'll take even 10% of that. So if there are any angel investors looking to invest in someones happiness (mine) send me a PM.
     
    zphage and Shawn like this.
  13. BluesOvertookMe

    BluesOvertookMe Forum Resident

    Location:
    Houston, TX, USA
    Some of you seem to be mad that some people that own a record store have money. Not me!
     
  14. dlemaudit

    dlemaudit Forum Resident

    Location:
    France, Paris area
    This ! and i come from France , i been three times to California and visited both SF and LA stores each time
    its an international destination , well almost ;) we just dont have those kind of stores in Europe
    Long Live Amobea ( and delicious Freakbeat too )
     
    Rodz42, DigMyGroove and SJP like this.
  15. Amoeba's Fund drive has done well, but has also slowed: currently at $275, 629
     

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