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Chart Hit Videos Whacks Adult

LIVONIA, Michigan – Eliminating the lucrative adult movie section and focusing on family videos was a risk, but it helped Farmington-based Chart Hit Videos stake a claim as a neighborhood video rental store.

The newest location in the eight-store chain is in Livonia. It sits in the middle of a neighborhood, drawing customers like Norman Szewc, 69, who loads up on classics and westerns.

“We don’t have cable,” Szewc said. “But we want to watch the movie at the time we want to watch it. They have what I’m looking for and I like their prices,” he said. “Sometimes, we have walked out with 11 movies in one day.”

The location and customers like Szewc is what Ray Jabra, vice president of Chart Hits Video of Farmington, was hoping for when his chain took over the Videojack store in Livonia earlier this year.

“That’s the kind of location you look for in this business,” Jabra said. “It’s surrounded by houses. It was under different ownership, so we bought the store and remodeled the whole thing.”

Out went the old wooden fixtures, adult movie section and boxy layout. In came new wire fixtures, open layout, carpeting and awning.

“We want to be a family-orientated chain,” he said. “We felt if we cut out the adult movies, we would gain some customers. They don’t like us to have an adult room.”

Cutting out adult movie sections is not a common practice among independent video stores, said Andrew Mun, public affairs manager for the Video Software Dealers Association.

“As far as product goes, the large chains don’t carry adult movies,” Mun said, “Independents can carry adult, which is lucrative.”

But even without adult movies, independent stores can still compete against the big chains in the video rental industry, which recorded $8.4 billion in rentals in 2002, he said.

“In smaller communities, the independent stores become a fixture in the neighborhood,” Mun said. “They support the Little League teams and do their best to extend personal relationships to their customers.”

Some independents will reserve titles for valued customers and offer home delivery. In addition, some stores provide movie duplication services, tanning beds, Internet cafes and pizzas to lure customers.

“The first stores to exclusively provide DVDs to their customers were independents,” Mun said. “They were able to adapt quickly and were very successful.”

Another key to competing against Blockbuster and the other national chains is to keep costs low, Jabra said.

“Our break-even point is much less than them,” he said. “They have extra expenses we don’t have. We control our purchasing so we don’t buy movies that won’t rent. We operate each store as if it is the only store we have.”


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