Declining sales of CDs over the past decade may indicate a grim future for music shops, but Ikuo Minewaki believes there is still a place for brick and mortar retail outlets.

“CDs are no longer items that you can leave on the store shelf and expect customers to purchase,” Minewaki, CEO of Tower Records Japan Inc., said in a speech Friday in Tokyo at the Foreign Correspondents’ Club of Japan.

Retail music chains “need to do what Amazon and other online retailers can’t” to compete with them, he said.

Tower Records opened its first store in the 1960s in California but closed all of retail stores in the United States in 2006 and went bankrupt as digital sales continued to trim the CD market.

Tower Records Japan, however, is independent from the U.S. chain and continues business today in 86 locations across the country.

The industry’s salad days are long gone, but Tower Records Japan managed to ring up sales of ¥55.5 billion in fiscal 2012.

Whereas Tower Records in the U.S. tried and failed to compete with mega retailers like Wal-Mart, Minewaki said that taking a different approach helped his company.

“For example, we spent a billion yen to renew our Shibuya store. We hold 700 events every year there,” he said, adding that the number of customers grew 130 percent from the previous year due to the renovation.

It is “crucial that we provide added value” to CDs, Minewaki said.

Taking an innovative approach came natural for the CEO, who was never just another brick in the wall. He joined the company and worked in a number of the chain’s stores for more than 20 years before being named to the executive position. He is also a true fan of music and supports musicians through independent labels that Tower Records created.

“I believe that music fans will continue to gather at stores that are managed by music fans,” Minewaki said of the importance of his own affection for music.

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