New Zealand
26 November 2007

Sounds Masterton's phone has been ringing of the hook after Wairarapa customers heard the news that the franchise had gone $20 million into the red. Illegal downloading, piracy and increasing online retail sales are being blamed for the decision by Icon Digital Entertainment to put its Sounds music business into voluntary administration.

Icon owes its bank and other creditors almost $20 million and has gone into voluntary administration using legislation that came into effect at the start of the month.

It is thought to be the first large company to use the legislation, which gives companies in financial distress a chance to continue trading.

The move has to be approved by all creditors, who are to meet on November 30. Sounds Masterton Manager Holly Jackson said the Queen Street store is safe and it's business as usual with brisk Christmas trade.

"We've got 100 per cent control over our business," she said.

The independently owned and operated franchise is not part of the chain controlled from Auckland head office, she said.

"We have a large and loyal customer base in Wairarapa and I think they're happy that we're still running."

Sounds Masterton co-owner Kevin Senior is disappointed by the threatened collapse but said it was business as usual at the Queen Street store.

"It is extremely unfortunate that our franchisor has had to go into voluntary administration due to financial problems.

"It's true that specialist music stores have been finding it tougher due to other formats, illegal downloading and increased competition. We are an independent store that carries the Sounds brand name and are not part of the Icon Digital Entertainment Group.

"We'd like to thank our local Wairarapa customers for their continued support and look forward to great Christmas trading," he said.

Senior said he had no plans to revamp the store or change its name at present.

He said he had a personal affinity with the brand he helped grow to more than 50 stores nationwide.

"The Sounds name means a lot to me because I helped it to grow, so on a personal note I'm very disappointed."

Senior was Sounds finance manager and a shareholder before the brand was sold to Icon in July last year.

Source : www.times-age.co.nz