Enrique Iglesias News

As Latin consumers increasingly turn to big-box stores as a source for music, the nation's largest independent Latin retailer is adapting -- by becoming "more of an entertainment store than just a record store," Ritmo Latino president David Massry said.

On August 2, a mariachi band played in front of Ritmo's third store-within-a-store, which opened recently in South Gate, Calif. The music store is leasing space from Mexican restaurant chain El Gallo Giro, where it also has listening stations.

The low-overhead concept is yielding better sales so far per square foot than Ritmo Latino's stand-alone stores. Ritmo also has added perfume counters, computers with Internet access and an arcade in one of its stores. And it has doubled its inventory of English-language recordings to 15 percent of its merchandise.

On the downside, Massry said, police and immigration authorities have been scaring away customers by setting up checkpoints near his stores. He said sales have shown a single-digit-percentage dip from last year. (For the market as a whole, Nielsen SoundScan data showed a 13 percent drop in first-half 2007 Latin album sales from the same period in 2006.)

Another obstacle the company faces is the trend of labels providing exclusive tracks to mass merchants, which prompted Ritmo to boycott Enrique Iglesias' "Insomniac" for several weeks this summer.

Massry doesn't blame such exclusives for lower sales at Ritmo -- yet. He said the business is profitable enough at his 50 stores nationwide to open two to three new stores by year's end.

As for the Iglesias controversy, the singer cut the ribbon at the August 7 opening of Ritmo's newest store in Anaheim, Calif.

Reuters/Billboard