GEORGE F. LEE / GLEE@STARBULLETIN.COM Music lover David Pliner of Punahou picked 100 CDs and DVDs to buy yesterday during a closing sale at Cheapo Music & Books in Puck's Alley in Moiliili.

After Saturday, Hawaii
will lose a Cheapo

General Manager Rick Kubach, recovering yesterday from knee surgery necessitated by a skateboarding accident, said he blamed "circumstances beyond our control" for the store's closing.

"It's the nature of the music industry. It's just not happening. It's not selling enough product to pay the bills," he said.

Carole Baguio, president of Pacific Hawaiian Music Distribution Corp., said that the industry is evolving as increasing numbers of consumers download music from the Internet.

College students spend whatever money they have on entertainment and food "and they're not necessarily purchasing any music, they're downloading it," she said.

However, Baguio noted that "The industry isn't dead itself. The No. 1 important thing in the retail business is location, and I just think Cheapo was in a tough location."

Kubach estimated that Cheapo at one time leased 9,000 square feet at Puck's Alley for retail space. About a month ago, the company closed its used bookstore there and consolidated it into the music store.

Now, the Puck's Alley music store is clearing out inventory, offering 75 percent off used merchandise including books, music, DVDs, VHS movies and vinyl records, according to Robin Maunakea, assistant manager and sales associate.

The eight employees will stay on after Saturday to help clear the store, which is to be vacated by Jan. 17, she said.

Minnesota-based owner Alan Brown was looking to sell the store but was unable to find a buyer, according to Lisa Morisheta, a manager. "He doesn't want any more stores outside of the mainland," she said.

However, a Cheapo store in Dededo, Guam, has not received notice of any plan to close and was open for business yesterday, according to store manager Grace Baylas.

In Hawaii, Cheapo bought the former Jelly's books and music stores in 1999. Since then, a new iteration of Jelly's opened in Aiea to compete with Cheapo.

Cheapo's Pearl Kai store closed in May 2003, while its Keeaumoku location closed the next month, according to Maunakea.

In February 2003, Cheapo filed for Chapter 11 bankruptcy reorganization after losing a lawsuit in state court. At issue in the suit was $100,000 in lease rent owed to its Pearl Kai landlord. The landlord won a default judgment ordering payment.

Cheapo, a source of used books, music and movies, recently started turning away hopeful sellers, who have gone across the street to Rainbow Books & Records at 1010 University Ave.

"I think (Cheapo's closure) is going to mean we're going to get a lot of books and CDs in here," said Tom Farley, vice president of Rainbow Books.

Rainbow's inventory has been increasing, but its CD sales have slowed because of Cheapo's clearance sale, he said.