The Detroit News has reported that Handleman will liquidate inventory and operating assets in their music division over the next few months, and it will be completely gone by the end of next year. Bluegrass labels had found a willing partner in Handleman in recent years, and many saw their product carried in Wal-Mart stores across the US as a result.
From The Detroit News:
“Our decision to exit the North American music business was difficult but unavoidable,” said [Handleman’s president and chief executive Al] Koch. “CD music sales have been declining at double-digit rates for several years both industrywide and at our customers’ stores, resulting in a sharp drop-off in our business. Unfortunately, even the significant steps we’ve taken over the past two years to reduce our costs have not enabled the Company to return to profitability.
“We have reluctantly concluded that there simply were not enough further cost reduction opportunities available to offset the margin erosion in future years from continuing sales declines.”
Handleman said it has agreed to sell its music inventory and some assets connected with its Wal-Mart business to Anderson Merchandisers, L.P. of Amarillo, Texas. Sales to Wal-Mart are the bulk of Handleman’s U.S. music sales, the company said.