Sanity (music store)
Revenue | $186 million (2012) |
---|---|
$10 million (2015) | |
Website | sanity.com.au |
Sanity is an online Australian music and entertainment retailer. The brand specialises in the sale of
The Sanity brand was owned and conceived by Brazin Limited from 1992, before being folded into
History
1980s
In 1980, 20-year-old
In 1986, Blundy and his business partner went their separate ways with Blundy selling his 60% stake in the eight-store Jetts chain to his former partner for $600,000.[2][3][4]
1990s
In 1990, Blundy's company Brazin Limited bought back the failed Jetts chain from the liquidators at a discount and began to progressively rebrand them as Delta music stores.[2][3][4]
The Sanity concept and brand was established and introduced by Brazin in 1992 with its first store at
In 1997, the company acquired 14 CC Records outlets in
In June 1998, it acquired 27 outlets from the
In September 1998, Brazin introduced IN2 Music stores by converting three Delta outlets in North Queensland and outer Melbourne. Like Delta, IN2 Music targeted a wider demographic than Sanity's focus on the youth 16-26 age group, giving Brazin more scope after the collapse of adult-orientated chain, Brashs. IN2 Music expanded the next year after the company purchased a further 23 CC Records stores in South Australia and Queensland, and re-branded more Delta outlets.[4][10]
2000s
In March 2000, Sanity's first foray into a digital music download service caused consternation within the industry when they signed a five-year deal with
In October 2001, Sanity expanded into the
In November 2002, an additional 41 British VShop music and mobile phone stores were acquired from the Virgin Group for £2 million. Earlier that year, Brazin experienced many delays in rebranding the Our Price stores due to
In June 2003, with Brazin's shareprice languishing at $0.55, some business analysts criticised the company's strategy of aggressive expansion in the Sanity brand – which they said may be cannibalising sales from sister stores – instead of concentrating on lifting the performance of existing outlets. Under this cloud, Blundy's retail investment company, Yoda Holdings, made a bid to take full control and privatise the company at $0.78. But after this announcement, shares rallied over Blundy's offer and the
In August 2003, Brazin acquired a 50 per cent shareholding in
In September 2003, even after increasing profitability across their store network, Brazin Limited sold all 118 Sanity UK stores (those, being the rebranded Our Price and VShop stores) to an investment firm called Primemist Limited, for an estimated £5 million (A$16.67 million), citing higher expectations not met. The Sanity name lived on in the UK for a very short while as rebranding was yet to occur, until Primemist immediately struggled to operate the chain due to difficulties with credit and stock purchasing, thus, entered administration in December 2003, progressively shutting 99 outlets as buyers for the entire business or individual parts of it could not be found. By April 2004, administrators BDO Stoy Hayward then closed the last 19 Sanity/Our Price stores.[30][31][32][33][34][35]
In July 2004, Brazin entered into an agreement with
In October 2005, Brazin acquired the Australian operations of HMV. The HMV Group's agreement with Brazin was to phase out the HMV brand in Australia by 2010. Immediately after this acquisition of HMV's 32 outlets, this put Brazin at its peak with its 74 Virgin stores in addition to Sanity's 215 and EzyDVD's 63 outlets around the country (not counting non-entertainment retail chains within Brazin such as, Bras 'N' Things) and was by far Australia's largest entertainment retailer with close to 43% of the music retail market. However, most HMV stores in Australia had very high overhead costs due to their large footprints and expensive locations, thus most were gradually closed upon the end of rental leases. The remaining stores were re-branded to Sanity over the next five years. The one notable exception to closing HMV stores in 2005 saw Brazin instead close its large Sanity store 60 meters away on the corner of Bourke Street Mall and Causeway Lane which had operated since 1996.[36][38] Also in that month, Brazin officially launched its Pulse loyalty card after a year of testing in the market. It worked by giving the customer one point for every dollar spent across the Sanity/Virgin/HMV/IN2 Music/EzyDVD/Bras 'N' Things/Dusk/Diva/Ghetto/Insane store network, receiving a $5 discount voucher or other offers once 100 points were reached.[39]
In February 2006, Brazin rolled out in-store kiosks where customers could select their own songs to either burn on a CD or download directly into an MP3 player. Fast Tracks Kiosks were initially installed in Sydney's Sanity/Virgin/HMV stores, with plans to go country-wide if successful. Yet, Brazin chose not to proceed.[40][41]
In May 2006, the company's entire 344-store Sanity/Virgin/HMV network withdrew sales data from the ARIA Charts, with Brazin CEO, Greg Milne citing the need for more updated day-to-day charts over ARIA's reliance on weekly information. However, it was reported that allegedly Brazin attempted to make ARIA pay an annual fee between $200,000 and $300,000 for their data through Sydney-based research firm, GFK. This was denied by Brazin, but six months later the company resumed data collection for ARIA. At that stage, Brazin's Entertainment Division included 254 Sanity, 22 HMV, 6 Virgin Megastores, and 62 Virgin at Myer stores. Some record label executives estimated their combined music retail market share at between 28% and 35%.[42][43][44]
In November 2006, after more than a year of a falling shareprice while average S&P/ASX 200 prices had gone up 21 per cent in the same period, Brazin's founder and majority shareholder, Brett Blundy, used his fully owned private retail investment company, BB Retail Capital, to buy the remaining 37.6 per cent of the company he did not already own and make it private. He said that with "stagnant profits, market uncertainty around Brazin's entertainment business and challenging retail market conditions", the company would be better off in private hands without the pressures of the sharemarket. Brazin's board and remaining shareholders agreed to Blundy's offer, leaving Brazin to be folded into BB Retail Capital and ceasing to exist in its own right.[4][45][46]
In March 2008, after months of delay and development, Sanity responded to the expanding Internet media environment by launching an online music subscription service in partnership with
In September 2009, CEO Brett Blundy sold the Entertainment Division of BB Retail Capital – which included the remaining 238 Sanity/Virgin/HMV store network – to BBRC's Head of Entertainment, Ray Itaoui, in a
2010s
By mid-2010, the last HMV store closed in Brisbane and all Virgin Megastores were phased out by Sanity Entertainment and closed.
In August 2010, all Virgin at Myer concept stores stopped operating under the Virgin brand due to Sanity Entertainment not renewing their contract with Myer Holdings (formerly Coles Myer) and were either closed or converted back into a basic audio/visual department operated by Myer (these non-branded audio/visual departments were later closed by Myer in 2011).[52] Sanity elected to exit the Virgin brand despite the licensing deal running until 2015.
In November 2013, Sanity owner, Ray Itaoui, together with Sanity's founder and BB Retail Capital owner, Brett Blundy, each bought 50 per cent stakes in former Brazin and BBRC 200-store chain, Bras 'N' Things, from private equity consortiums, ANZ and IMF Investors. Announcing the deal, Blundy said to the media, "Today, more than ever, I believe in Bras 'N' Things and our business model. I believe in our customer and I believe in our people." Asked about Itaoui, he added, "Ray has done a remarkable job with Sanity. We have always worked well together and I'm excited about our next venture taking Bras 'N' Things to the next level."[53][54][55]
2020s
As of December 2022, Sanity had 12 stores remaining in New South Wales. There are also 12 stores remaining in Queensland, six stores in Victoria, three stores in South Australia, and four stores each in Western Australia and Tasmania.[56]
In January 2023, Sanity announced it would close its 50 remaining physical stores by the end of April 2023. The company will continue to operate its online store.[57]
On March 26, 2023, Sanity closed down its two remaining stores, marking the official end of its physical operations.
Recent developments
Despite consumer behaviour transitioning to streaming and online services, the 2000s saw Sanity resist change and keep their bricks-and-mortar store business model intact without too many changes. With Sanity reduced to 21 per cent market share, against JB Hi-Fi's 50 per cent, the chief strategy seems to be targeted towards rationalisation and increased competition from the Melbourne-based retailer, by gradually closing down large footprint stores within capital city CBDs, inner suburbs and airports (where JB Hi-Fi have a greater hold over these markets, and rents are more expensive), the three exceptions being Sanity opening stores in direct competition to JB Hi-Fi in Robina Town Centre (April 2010), Mackay (May 2012) and Casuarina Square (August 2012) where they were already well established.[58][59] Yet, mostly Sanity have been replacing some of these stores by opening some new smaller outlets in regional areas such as Broome, Alice Springs (that store being their first Northern Territory outlet which opened in March 2011), and Emerald.[60]
SAIN Magazine SAIN Unlimited and Ultimate
Sain magazine was published monthly from July 1998 to September 2006 by Sain Media and Publishing and was designed by publishing agency Grin Creative. SAIN was a 100 pages A4 full glossy title. It reached its 99th issue before being discontinued. For much of its life, it featured a flip-printing style; one half of the magazine was dedicated to movies and DVD releases, the other side to music.
Due to the resounding success of SAIN Magazine, SAIN Media and Publishing and Grin Creative produced Sain UNlimited a 200 page glossy title made available in news stands nationally. Sain UNlimited was Australia's largest music publication during its time.
Ultimate was the final magazine of Sanity Entertainment, and was available free through Sanity/Virgin/HMV stores since December 2006 either monthly or bi-monthly. It was published by Nuclear Media and Publishing.[61] In April 2013, it reached its 49th issue when the run stopped without announcement.
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