When Mark Hebert and his management team decided to consolidate Cosmo Music’s two retail outlets into one super store, they researched the idea thoroughly. Studies and forecasts were compiled and a slew of experts were consulted.
However, like many entrepreneurial decisions, Hebert admits this one came down to gut instinct. At 55,000 square-feet, the new store is the largest of its kind in North America and one of the largest in the world, Hebert says. It has 200 employees and provides music lessons to 2,200 students.
“In short, we were taking a big gamble,” Hebert, Cosmo’s president, says. “We knew that only time would tell whether we had made the right move.”
Today, two and a half years since the opening, it’s clear to Hebert that Cosmo Music is hitting all of the right notes. The company, which bills itself as “The Musical Instrument Superstore,” provides customers access to a vast selection of instruments and sheet music as well as 42 studios for lessons. It also has a large repair shop.
“The first vote of confidence we got was when sales doubled almost immediately after the new store opened,” Hebert says. “However, productivity also improved dramatically. That’s important because it boosts both our top and bottom lines.”
Hebert attributes productivity gains to many of the usual efficiencies derived from location consolidations. These include the merging of receiving facilities and other functions, as well as a complete redesign of the retail environment.
“Our new 275 person amphitheatre that adjoins the store, provides an outlet for music professionals (including members from bands such as the Tragically Hip, Triumph and Beyonce’s horn section) to give presentations. It is a big selling point. The facility both boosts traffic and store name recognition.”
Consolidation of the two stores also enabled Cosmo Music’s technology staff to re-think the company’s work flows, which led to further productivity gains. IT personnel are now looking to launch an E-commerce site to build the store’s online presence.
Cosmo Music was founded by Hebert’s father Tom in the 1960s as a guitar importer. The company has grown steadily since then, in part, due to its relationship with the Business Development Bank of Canada (BDC), which financed its expansions as far back as the 1970s. This long and stable relationship was important when Cosmo began to line up financing for its latest $11 million megastore investment.
Hebert says BDC quickly emerged as their first choice this time around too.
“BDC understands entrepreneurs,” Hebert says. “They came through with a package that was unbeatable. Safe and secure financing for a business that was in growth mode gave Cosmo Music the comfort to forge ahead.”
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.