You're about to listen to the latest series of toast. Episodes will be released weekly wherever you get your podcasts. But if you're in the UK, you can listen to the latest episodes seven days earlier than anywhere else, first on BBC Sounds.
Hello and welcome to the BBC Radio 4 series Toast where we look at incredible business ideas that offered a lot to customers but still somehow ended up toast. I'm Sean Farrington, BBC business journalist with me as entrepreneur, resident business guru Sam White, Sam Hello.
Hello lovely how are you I am very well if you're new to toast the deal is we keep Sam in the dark about what's coming all our reactions are off the cuff no research done before but at the end of it all she needs to give her professional opinion on why this particular business disappeared from our high streets let's get cracking
There was a time when almost every major town or city in the UK would have a branch of this particular business. It was a cut price music pioneer. Browsing its stores on a Saturday would have been an absolute joy for many a teenager across the UK. This is before the internet age.
So never mind streaming or downloading, this was the glory years of when you had to buy your own music physically. It was a seven inch single, the album, the CD, the cassettes. The specialist music chain had more than 300 stores and was known for its red and black branding with a picture of a vinyl record in its logo.
Sam, do you know what we're on about? I do know what we're on about, but can't remember what it's called. It's not HMB. No. Ah, OK, right. I have not got that. It was the one ran the corner in Wolverhampton in the shopping center, our price.
Oh, oh, oh, oh, price. Now, I was H and V girl. Maybe there was just one closer to me. So the first shop opened way back in 1971 by the founders, Gary Nesbitt and Michael Isaacs. Gary tried to buy a cassette tape from a specially shopping London. Found it was closed for lunch, figured there was a gap in the market.
I mean, that sounds like entrepreneur's story all over. Cassettes were taking off, so their first stores were called The Tape Revolution. The name, Our Price Records, came a bit later after they slashed their prices. Undercutting other retailers, they went for volume, trying to sell as many cassettes and vinyl records as they could on even tighter margins. Phil Coco joins us, who worked for the British record label, Chrysalis Records, from 1975 until 2000, ended up as their marketing director as well. Thanks for joining us, Phil. Just take it back.
to what buying music was like as our price was starting out. Back in the 70s, where were people buying music from?
rock orientated label. Unless you were an EMI and you had lots of pop hits, you didn't sell through those three big chains. But when our price started, it really helped us. We were a smallish independent, as were they, and it fits really well.
Michael was a good retailer. I do remember him telling me it'd been to every high street in the country. You could ask him, where would you want to be in Dundee? And tell you attend to the high street you wanted to be, because he stood there with a clicker, counting how many people were walking past.
alongside those characteristics of Michael. What was it that set our price apart from the competition? The other thing that they were really good at, I went to one of their training courses once, where Michael and Gary would train all the new staff, and I remember being in there one day, just sitting at the back observing. Gary said, if someone comes into our shop and says, have you got the Frank Zapper album, and you say yes, it's over there, and an alternative,
I'll fire you. He said you get out from behind the desk. You pick it up, you put it in their hands to make a sale. They were great to work with and understood what we were trying to do as a business. So they launched what they called their co-op ads. So they would be in all the music press.
We'd have a new album coming out from UFOs, a rock act, and you'd phone them and say, is the enemy free and sounds free on these dates? And then it would do by that new album at our price, you know, their competitive rate. That idea of, you know, get Adele's new album at HMV, that first came about through our price. I think so. I think it did. And then they moved into radio and finally television.
So that's how they were driving sales of your record through their stores. And so you split the costs. We did split the costs more in their favor than ours, but we did split the costs. Now in 1980, our price records bought a chain called Harlequin Records rebranding and converting their stores. Why was that such a big deal, Phil?
I think they had about 70 stores, a lot more than our price. And Gary and Mike, up to that point, I think they'd always said they didn't want anywhere that wasn't an hour from where they lived in North London. So they could always go and visit the stores. Well, suddenly they were getting bigger than that. And I think that expansion led them to think actually we can be everywhere.
Let's bring in Alison Warner, who worked at our prize in the 1980s. Hi, Alison. Hi there. What do you remember about those days? Well, I joined our prize in 1982. It was a summer job. I was thinking about going on to further education, but landed a job with our prize within, I don't know, six months. I was an assistant manager. And then at the age of 22, managing my own record store, which I thought was
the best possible job I could have at that age. Gary and Mike believed in promotion from within, so if you started out as an assistant in the enterprise stores, they felt you built up the knowledge. It was all about passion, you know, you had to be really excited and keen and understanding of music and exactly what the customer wanted, and I think they felt that knowledge grew with you, so why not promote from within?
So Sam again, something like that, it seemed like quite the gamble to have that faith in somebody who may not have been there that long, but it's absolutely the right strategy and it's been proven time and time again. People think business is a successful by bringing in heavy hitters from outside, but actually the opposite is true, homegrown talent that understands the business and has
been socialised by the founders is perfect. I should imagine that they had a disproportionately high number of young customers. So if you've got a young manager dealing with a target market that is younger, there's an alignment there, isn't there? It's going to resonate for the customers.
In the 1980s we had CDs come in, compact discs as they would have more lengthily been called back then giving another boost to the business and then our price records went public so it floated on the London stock market. All of a sudden you know this gritty high street shop is getting a share price so people could buy and sell shares in it and a couple of years later
it was actually bought for £43 million by one of its competitors, one that Phil's mentioned, WH Smith. Phil, the original founders, they did stay on for a bit, so did you notice changes under that new ownership as it went on to be owned by WH Smith? Michael wasn't no longer choosing any new shops that would be open, they were decided by WH Smith, so maybe wrong, but that's how I remember it. And also they decided to change all the facades of the shops, change the logo, change everything.
I thought why would you change the successful brand? Alison, what difference did you notice WH Smith taking over?
I ended up going into the head office, first of all to run the sales office and I became a buyer for the emerging home entertainment world. So what was then VHS and also the classical music. And we changed from our price records to our price music in 1988, but we diversified at the same time. So we saw that our price video opening as well.
But it still felt separate from WH Smith. We were still doing our own marketing. We had our own buying decisions. It still felt, to a certain extent, back in 1988, 89, fairly independent.
Around that time where it changed its name to our price music, it bought extra shops from Virgin as well, which wanted rid of some of the smaller units so it could focus on those mega stores it became so famous for. It wasn't just the shops that changed hands, some of the staff too, including Neil Boot, who joins us now. Neil, welcome to Toast.
Thanks for being with us. You transferred over as a store manager to our price from Virgin, got promoted to a marketing job at Head Office. So what was it that our price were doing that felt like it was on the money for you? Well, it was pretty innovative. I mean, Phil's already alluded to this. So my job became selling on those co-op marketing packages, including TV. What was very clever about that was that
We'd commit to 12 months of Channel 4 TV airtime, get very good discounts as a result of that. And then we would sell them on packaged together with install displays, which is fairly common in retail now, but at the time, especially in music retailing, that was very innovative. And we were actually a profit center and made quite a lot of money from that. It was pressurised though. I remember those are the days when most of us did smoke in the office calling round.
the likes of Simon Cowell trying to convince him that the package we had in London for 25 grand was just what he needed right now. Because if we didn't sell it, then we placed our own ads into those slots and that was a cost to the business. The other quite innovative thing was the our price chart did not reflect the national chart for albums. So that was also a marketing tool. So, I mean, it wasn't flagrantly, do you want to be number one next?
But certainly when it came to helping developing acts to get onto that main stretch of the wall in the zone A space at the front of the store, if you're a new act, it was a big thing. So we were the specialist on the high street for a while until HMV and laterally Virgin woke up to the opportunity.
So Gary Nesbitt and Michael Isaac's little tape shop had grown into one of the biggest specialist music retailers we'd ever seen. Our price had a branch on every major high street making it the local record shop for everyone. Its rise had been rapid but its demise would be even quicker. It happened before the internet got a proper stranglehold on the music industry as well. So what went wrong?
As the 1990s went on, our price, music, which was, of course, remember owned by WH Smith, it grew ever closer to Virgin. So these rival businesses agreed to join forces to make more of Virgin's bigger music shops, those mega stores, with WH Smith taking a 50% stake in Virgin retail. And later on, the two businesses actually merged with WH Smith up in its stake to three quarters of the business.
Although Virgin and our price continued to trade as separate entities. Neil, around this time you were involved in a change of our price music's name. Again, this time to just our price. This is the one I remember. Why was that?
Every record store, pretty much, had morphed from being a music store into a home entertainment store. Video, VHS, and TVD, and then obviously PlayStation, Sega, Nintendo, that whole computer games market and exploded. And we wanted to take advantage of that.
The other reason was that most people's decision as to which store they used in their local town was not really to do with brand, it was sometimes to do with convenience. But it was generally about what they perceived to be the best store and there was a very close correlation between that and the size of the store or let's say the breadth of range.
And our price had always stuck rigidly to 1500 square feet, narrow stores. And at this point in time, we decided we needed to react to the fact that HIV and Virgin were often beating us in the big cities, in the larger towns, because simply because they got bigger stores. Now, those stores needed to be home entertainment stores. So again, ultimately, the decision was taken to drop the music and just stick with our price.
are probably still going, still on the high streets around the country at this point. As the 90s drew to a close, supermarkets got in on the act. Remember those aisles all of a sudden? Not just full of fruit and veg anymore. Books, CDs, DVDs, selling top 40 CDs at a big discount as well. Virgin Entertainment around this point had paid £145 million to WH Smith.
to take over our price and Virgin megastores. Neil, you actually ended up on the board of this business marketing director, later commercial director. So what was the plan for our price once Virgin Entertainment had the brand, had the stores? Well, there'd been a raging debate with Smiths before this purchase about our price's ability to
develop a larger store format and to take on HMV and Virgin and we'd done that we'd opened 5000 square feet stores with large games and video ranges and they'd done pretty well but ultimately the decision was to back Virgin as the better proposition given its core
brand was the Virgin Megastore brand. And of course, this was probably the peak of Virgin's powers as a brand. Richard Branson, the first probably business celebrity, was riding high. Lots of PR and Virgin almost epitomized the era. So you can understand why that decision was taken. The problem, of course, is that in retail, if you've got 300 stores, 25-year leases,
You're something of an oil tanker when it comes to repositioning. Our price often had three stores in one city rather than one large store. Tell us what happened when Virgin Mobile was launched.
Well, I was not, I mean, I was not sort of intimately involved in the Virgin Mobile business. But as I recall, when it was first announced, it was going to be direct to consumer. But fairly quickly, it became apparent the business needed retail distribution. And lo and behold, the Virgin Group now had a large number of stores, both Virgin and our price.
which potentially could sell mobile phones. And so, you know, the large stores freeing up space was fairly straightforward. The more you push that down into the our price chain, the more you are going to compromise the core entertainment offer, which as we've already discussed, was under pressure as it was because we were trying to stock music, video and computer games. So what was a V-Shop, Neil? Because some of the branches of our price, they were being converted instead into these V-shops. What were they doing?
So again, going back to this question of, well, what do we do with these small stores if they're not Virgin branded and we can't sell them? V-Shop was a potential answer to that in that this idea arose that, well, if we can create a Virgin branded business, that's a sort of hybrid mobile meets entertainment. You could see how that perhaps was not a bad idea.
the problem was that it meant sacrificing more of the core entertainment offer so for example we took out all of the back catalog music and we installed touchscreen units which would allow a customer to order anything but technology at that time didn't always work and again if you've got an hnv or frankly just a bigger
better entertainment store, they might not come to you because you'd not got the range. There's definitely attention there. I mean, the stores did pretty well from what I remember, but the deal with Virgin Mobile was basically to sell the phones as a piece of hardware. So we were making a margin on the hardware. We weren't getting any share of the revenue per user going forward, the subscription income, which if that had been the case, that might have been a more attractive business
So some of those branches turned into V-Shops. Some of them were disappearing, sold off, repurposed by other retailers. 2001, we're at now Virgin, actually sold the last 77 hour price stores, which we're now making a loss by this point. And they sold them to an Australian retailer called Brazen, didn't want the hour price name. Instead, it set about converting those shops into its own brand called Sanity.
So the our price name really was starting to disappear pretty quickly. I'm interested in this now because our price has been etched on the minds of customers around the UK for so long. This new retail abrasion says, now we don't even want it at all. What were they all thinking that it didn't have any worth?
Well, it certainly had awareness and it certainly had, you know, trust. But as a name, there was this period where the business was able to undercut way back in the midst of time. But you are now up against supermarkets who, you know, their low-cost operators, their whole business is about being able to undercut. So that was unhelpful. Within a few years, Brazen sold all its UK shops for 5 million quid to a company called Primest.
that couldn't make a success of them. And so at that point, the business was broken up. And so we reckon by the end of 2004, the our price name had finally disappeared from every UK high street. I mean, Neil, why in your view didn't our price survive? What was the key moment for you? I think it's really simple. Our price as a format
that the economics of it, it was just superseded. We see all the time with businesses, every age has its brands that come and go, and our price is one of those at that point where the consumer really wanted bigger stores with a wider home entertainment offering, and the decision was taken not to back our price and to run with Virgin. Its days were numbered,
Phil Coco has been listening to all of this, a former marketing director at Chrysalis Records. Phil, what do you think? What was the moment for you that meant our price wasn't going to survive and be the beast on the high streets that it was? A moment Smith sport it.
Mike and Gary had a fantastic reputation and relationship with all the record companies. The moment they left that had gone. And also, as you said, the supermarkets then came in and they were competing on their maiden selling points, the price. Downloading then streaming music and videos over the internet transformed the market, of course, which explains why a lot of those music and entertainment shops that once grey star high streets also disappeared.
But the out price story isn't completely over because the brand is back online only, selling music, merchandise and audio equipment. Paul Harris is the man behind it and joins us on toast. Paul, thanks for being with us. No, thank you very much for having us on. We've got simple questions for you really. Why do you think you can make a success of the brand now?
I think there's a lot of trust and love for the brand. Certainly, since relaunching it, we've had loads of people just emailing us and getting in contact saying they love working there, love browsing the shops, and just a lot of fondness for it. But pragmatically, the difference between 2004 and 2024 is that for the last 17 years, vinyl has been growing, booming.
even CDs. So I think the consumers for vinyl and CDs and audio equipment are the same people who largely were buying there when they were teenagers. Anyone over 40 remembers the brand but also we think
Younger people are getting into it because they want to experience buying music in the same way and owning music. The pleasure of owning vinyl, looking through the sleeve notes. Young people just want to have something tangible. Everything is digital. So for me, the timing seems right for us to do this.
Are you ever going to open any shops on the high streets for our price again, Paul? It's not my area of expertise, but if we did, we'd look at it as being a franchise-based model because one of the things that was mentioned earlier was putting passionate people in charge. And I think with a franchise-based business, you're going to put passionate people running the stores. And also these days,
I think they have to be more than just record stores. They have to be destinations, live music, great local coffees, soft furnishings, demos, personal appearances, more than just retail to survive the current high street landscape. Paul, good luck with it all. Thanks for joining us on toast.
is really a single reason for any kind of business failure or a business going from being on every high street to being on no high street. But what are your thoughts there on why our price disappeared entirely?
I mean, this keeps coming up time and time again, doesn't it? You had an original founder team passionate about the business, super dialed into their customer base, their products, how to make it work. And then when new ownership comes in and kind of has this white wash across the top, lots of things get lost.
So for a business to be successful, it has to have a vision, a strategy, and it has to be ruthlessly obsessed with getting better, you know, feeling the market, making the changes where you need to make. And it just seems to me that they lost their way. As soon as those founders were moved out, it became a small fish in a big pond, couldn't find its voice to fight back. My personal belief is that
Any business can survive with the right management if they're reading the market and making the right changes. And Sam, always good to reflect on these things just in case any of us are thinking of setting up a 300 store music chain. What lessons can you learn to keep it going to make sure it just doesn't disappear from everybody's minds.
Look, if you're going to sell to somebody, make sure that you're aligned on the vision for the business moving forward. If you really want it to be a success and just being conscious of competitors that you might not realize are competitors. So was it on anybody's radar that the supermarkets were starting to cut in because they would have had to have flipped selling cheap? We're not going to win on because the supermarkets are always going to beat us on that. So what else can we do?
Can we create that experience for customers where they're really, you know, can take the time in the record shop, look at the vinyl and have a cup of coffee and have an experience? Is that the route we need to go down to? You need to keep an eye on who's coming alongside you that maybe is going to take your USP at that point. And if there's no way you can compete on that, what can you compete on?
Sam, thank you as ever, big thanks to our guests as well. Alison Warner, Phil Kockel, Neil Boot and Paul Harris. Next time on Toast, we're up, up and away, assessing the fortunes of an airline that made package holidays possible. So why did Dan Eyre come down with a bump? Toast is presented by me, Sean Farrington. It was produced by Emma Smith and John Douglas. It's a BBC Audio North production for Radio 4 and BBC Sounds.
I'm Hannah Fry. And I'm Dara O'Bree. And in the all-new series of curious cases, things are getting curiouser and curiouser. We'll be looking the universe squarely in the eye and demanding an answer to your everyday mysteries. Including... Can you actually die of boredom? Why do some people taste music? And how many lemons would it take to power a spaceship? We will shine a light on the world's most captivating oddities. Brought to us by you. You delightful bunch of weirdos.
I don't think you're allowed to call them that. I love them really. Curious cases. On Radio 4. And available now on BBC Sounds.
