Golden Discs looks to the web for a silver lining

ONE MORE THING: WITH SALES in its traditional high street stores under pressure, Irish retailer Golden Discs is taking the fight to the web.

Managing director Stephen Fitzgeraldold me this week that it plans to launch an e-commerce website in the third quarter of this year that will ship CDs, DVDs and box sets to customers.

It is in “late discussions” with a couple of parties who will handle warehousing and logistics. The move will involve a “modest” investment, Fitzgerald said.

With Amazon, eBay and a myriad other e-retailers already offering this service, why is Golden Discs trying to muscle in on this market?

“We think that with time it will grow. Our brand recognition in Ireland is huge. So many people bought their first records with Golden Discs. I think they’ll be interested in what we’ll have to offer.”

Golden Discs already has a download service – Goldendiscs.ie– with six to seven million music tracks available. "Hopefully by Q1 we'll be doing movie downloads, too."

Fitzgerald isn’t giving up on its brick and mortar just yet.

“It’s still a €120 million market,” he said. “Certainly it’s very challenging but I wouldn’t be writing it off just yet.”

The upside to the economic downturn is that better lease deals are now available.

“You can certainly get more favourable deals with landlords,” Fitzgerald explained.

Golden Discs has 16 shops at present and Fitzgerald hopes to add another before the year end.

“We’re are talking to three landlords at the moment, but it’s too early to say where we’ll open.”

The retailer made a loss of €73,000 last year compared with a deficit of €710,000 in 2010. Turnover fell by 4.4 per cent to €10.8 million.

Fitzgerald is hopeful that it might return to the black this year. “That’s certainly what we’re aiming for, but it’s too early in the year to be definitive. A lot will depend on Christmas trading, which is a big part of our business. We were up last Christmas.”

Golden Discs emerged from examinership in May 2009 following a €250,000 investment in the business.

Fitzgerald, who owns one third of the business, admits that he didn’t expect that trading would still be so tough three years on.

“I wouldn’t have foreseen where we’re at now. The good thing for us is that we’ve made our changes. We’re out ahead of others in that respect.”