Family Affair

Sale of Zia Enterprises ushers in a new era for 20-year-old record-store chain

Three months ago, Zia Record Exchange celebrated its 20th anniversary with a festive blowout at the Tempe club Boston's. There was much cause for celebration. In an era dominated by corporate megaliths, Zia stood as a rare example of a family-owned enterprise that had survived the unpredictable barometric shifts of the fickle music industry.

But on Friday, August 4, Zia employees learned that the music empire -- launched in 1980 by local music impresario Brad Singer, and sustained since his death in May 1998 by family members -- had been sold to an investment group that includes three Scottsdale accountants and some of their clients. While the move might be a jolt to those who've come to regard the record chain as synonymous with Singer, insiders were neither surprised nor disturbed by the announcement.

"It could be a very good thing," says one longtime Zia employee, who attended a 45-minute conference in which store managers and assistant managers were told of the sale. "It sounds like they want to put more money into it and build it up into something bigger."

Since Singer's death, his businesses have been wracked by financial and creative uncertainty. Initially, his brother, Wayne Singer, handled the affairs of Zia and its related companies -- Impact Music, CHUD Graphics and Epiphany Records. Less than three months after Brad Singer died, his brother shut down Epiphany, a record label that had been created primarily to advance the cause of local music. Several months ago, the dormant Epiphany back catalogue was sold to Valley music historian John Dixon.

Wayne Singer also removed his brother's handpicked protégé, Steve Wiley, as general manager of Zia Enterprises, and closed two of Zia's eight Arizona record-store locations: one in the basement of Arizona State's Memorial Union, and another in Tucson. In an act loaded with irony, Wiley and two other ex-employees of Zia swiftly followed the ASU closing by setting up their own record store, Hoodlums, in the same spot.

As questions grew about Zia's future, Brad Singer's ex-wife Sandra began to take a more active role in the company. Wayne Singer left his position, and Sandra hired Jim Kelly as chief operations officer and Barry Barton as chief financial officer.

But, according to Barton, legal issues related to Singer's three children (Bryan, Caitlin and Zach) have limited his family's ability to sink capital into the business over the past two years.

"The company was in a trust for the minor children," Barton says. "It gave very little flexibility to expand and grow the company, because you had to get court approval before you could do anything. So, by selling it, these new investors want to -- and have the capital to -- expand the company."

As a result, some employees view the sale as an inevitable resolution to a tangled web of interests.

"I think Sandra's been wanting to sell, pretty much since Brad died, but I don't know if anybody's been willing to provide her asking price," says the longtime employee who attended the sale announcement. "The money's been tied up, and the stores haven't been able to move forward businesswise because of that. But I guess they got a good offer and decided to get out."

Barton says he does not know the names of any individuals in the investment group that bought Zia, but says they've formed a limited-liability company (LLC) called Wamtones.

"It's a 100 percent stock buyout," he says. "Nothing really changes, everything stays in place. Their goal is to have management stay in place. They don't want to get involved in management; they're not music people. They just want to hopefully buy a good investment and watch it grow."

The new owners did not attend the August 4 meeting in which the sale was announced, nor were the terms of the sale disclosed. "They just kept reiterating that Brad's kids were well taken care of," the employee says.

Staffers were also assured that no radical changes would occur, and that Zia would maintain the essence of the mom-and-pop aesthetic that Singer brought to the seminal record-store chain two decades ago.

"They want to remain independent," the employee says. "From what they told us, they're not looking for any kind of corporate merger or buyout; they really want to stay away from anything like that. They just want to make Zia the best indie chain that it can be.

"I guess these investors really want to move forward. They've started looking at a whole new computer system, they're putting more money into the Web site, they're talking about opening several new stores. They'll try to get into Flagstaff, and they've talked about branching out to Ahwatukee and other places."

Barton sees it as a series of upsides with no downside.

"It's the best thing that could happen for Zia," he says. "Everyone came out a winner."

 
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