Retail Madness

Photo by James BunoanThe goal of making money in independent music seems quixotic, and Rand Foster, owner of Long Beach indie record store Fingerprints, may be tilting at the biggest windmill of them all. Foster, 39, is one of five indie store owners around the country who last month became plaintiffs in a class-action suit against Best Buy Co. Inc. The suit charges that the electronics giant broke state and federal anti-trust laws with its practice of selling CDs as loss leaders—peddling them so cheaply that the stores purposely lose money on them—in an effort to attract more people into Best Buy stores, in hopes that they'll buy bigger-ticket items such as DVD players, computers and refrigerators while they're there.

The suit alleges that Best Buy's practice constitutes unfair competition. For example, Foster says, Best Buy initially sold Radiohead's most recent disc Hail to the Thief for $9.99—$3 lower than indie stores can buy the CD wholesale.

“[Customers] say that they'd like to support us, but first we have to match [Best Buy's] price,” says Foster. “Selling at a $3 loss isn't support. We can't afford it.”

The suit also alleges that Best Buy breaks anti-trust laws by throwing its weight around to get breaks on other goodies, such as paid advertising and exclusive sale items from record labels—deals not available to smaller indie shops.

At press time, Best Buy's lawyers had not issued a reply to the suit.

Last week, Universal Music Group announced an across-the-board reduction in the wholesale price of its CDs. Foster says “it's a little too soon to say what impact this will have” on the suit.

Foster maintains that while Best Buy's practices hurt indies, Fingerprints remains healthy. “The store may be up a nominal amount this year because of sales of rock T-shirts and lifestyle items,” he says. “We're not ready for an endangered record store postage stamp yet.”

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