Janet Jackson Sale Irks Rival Stores

Record buyers must have thought it was too good to be true when they saw Janet Jackson’s new album going for $9.98 at the 91 Music Plus stores in California. That’s a full $3 less than the normal discount price on CDs, an almost unheard-of bargain on such an obvious smash.

But other music retailers are now asking whether the heavily advertised deal--which was applicable through last Sunday--was too good to be legal.

According to the state’s fair pricing law, stores must sell merchandise for at least 6% more than they pay for it. Retailers generally pay around $10.70 for top-line CD product--though discounts for bulk orders and early payments can reduce that amount to about $10. Either way, it doesn’t add up to a 6% profit--and Virgin Records, which released “janet.,” and CEMA, which distributes it, say they didn’t give the chain an additional bonus discount.

A spokesman for Blockbuster Entertainment, which bought the Music Plus chain earlier this year, insists that everything about the sale was proper.

“We are making a profit and operating within the law,” says Wally Knies, Florida-based Blockbuster’s director of communications. “We’re not selling them at a loss. (The sale price) was just done for competitive reasons.”

But while plenty of Jackson fans have bought the album, few in the music business are buying the Blockbuster statement.

“I think they were ignorant of the law,” says one music store chain executive who asked to be anonymous, but who says one Music Plus official admitted to him that the sale was “wrong.”

CEMA distribution president Russ Bach says that the sale price was below the firm’s approved minimum and that CEMA would not pay for the advertising Music Plus took out for the sale, generally a standard practice in the industry.

But Bach also said that CEMA would not seek any action against Music Plus or Blockbuster if it was believed that the sale violated the law. That, he says, would have to be initiated by other retailers, who are said to be looking into the matter now.

Why would a company sell such a big hit at little or no profit? For Blockbuster, best known for its video stores, it’s a way to make a big splash.

“They decided they wanted to make a statement that they’re in the record business,” says one industry executive.