Latin music retailer closes its doors after 20 years

MIAMI (Billboard) - Ritmo Latino, once the biggest Latin music chain in the United States, has quietly shuttered the last of its stores, marking the final chapter for a company that for years defied the woes of the marketplace.

"I never gave up until the last moment," says founder/owner David Massry, who in 2008 had 53 stores nationwide. "Even in 2007 I opened up new stores. The truth is, I was in denial."

Even as other retailers shut down or floundered, Ritmo Latino continued to expand. Locations in predominantly Latin areas with heavy foot traffic helped fuel the growth.

Founded 20 years ago, the chain became one of the most important players in Latin retail because it stocked Latin music with a depth and breadth not found in the mainstream marketplace. When the market shifted, Ritmo was ahead of the curve, installing listening stations and diversifying its product. And as recently as 2008, the chain partnered with bilingual channel MTV Tr3s to launch branded sections in stores nationwide.

"The Ritmo stores were fun to be in," Venetian Marketing Group CEO Jeff Young says. "Lots of listening stations, endcaps, features. I always remember during NARM (the National Association of Recording Merchandisers' convention) and other conferences (Massry) would take out a busload of us to visit a new store or a refurbished store that incorporated the latest retail ideas of the moment."

But circumstances finally caught up with Ritmo.

"It was a combination of everything," Massry says. "People stopped buying music because they were downloading, (there was) the immigration problem, the economy, and the truth is, the people who run the music labels didn't help. It's hard to say what had the most impact."

Ritmo's final shutdown, during the past month, took no one by surprise. Some of the majors hadn't done business with the chain for more than a year.

Still, "losing (a retailer) that specifically serviced the genre is a major blow," Sony Music Latin senior vice president Guillermo Page says. "Unfortunately, I believe they could not adapt their business model quick enough in a challenging environment. It became worse as the economy and immigration issues accelerated the perfect storm the Latin business has been in for quite some time."

Sales of Latin music in the United States continue to plunge. According to Nielsen SoundScan, sales of Latin music albums totaled 6.4 million units in the first six months of 2010, down from 8.9 million in the corresponding period last year.

Massry faced an additional problem because the costs associated with running stand-alone music stores like his were much higher than those of mass merchants that can spread costs across different lines of businesses.

In addition to signaling the loss of a leader in Latin music retailing, the closure of Ritmo, a champion of new acts, will make breaking developing artists at retail that much more of a challenge.

As for Massry, he has liquidated his inventory and converted a few of his locations into T-Mobile stores, with no immediate plans to return to music retailing.

"I'm completely out of the business," he says.