Store Wars : Retailing: A busy intersection has become the battleground for three giant music and video outlets. And just up the street, a specialty store is trying to carve out a niche.

At the busy intersection of Hawthorne and Sepulveda boulevards in Torrance, a nearly renovated Wherehouse Entertainment store sits on one corner, a sleek white palace stocked with thousands of compact discs, videotapes and video games. Next door, Music Plus, now owned by video giant Blockbuster Entertainment, is preparing to renovate its store in 1994, rename it Blockbuster Music and double its inventory.

Across the street, Tower Records & Video’s yellow and teal-colored store uses a Main Street theme to separate compact disc, tape, video and classical music departments. And half a block away sits the underdog, Funkytown Records, which specializes in new and used vinyl records and imported CDs.

This unusual concentration of music and video stores has made for an intense retail battle at one of the South Bay’s busiest intersections. But it also reflects the marketing forces at work these days in the music and video business nationally.

Independent retailers are trying to survive by targeting a niche base of customers for foreign music titles, avant-garde videos and other products not carried by mainstream stores. Big chains, meanwhile, are seeking to lure customers of all age groups and tastes with huge inventories and an entertaining shopping experience that features listening bays and live performances.

“At that corner, there’s definitely enough exposure to attract the impulse buyer, which is so important to the business,” said Ted Lawson, a retail broker and senior vice president at CB Commercial Real Estate Co. in Torrance. “All the retailers want to be the dominant entity in the market. They want to be bigger and attract the broadest base of customers.”

Still more competition can be found up the street. A block to the north is Blockbuster Video. Just a stone’s throw away is Del Amo Fashion Center, which has home entertainment retailers such as Suncoast Pictures, which specializes in home video and movie and TV merchandise, and Sam Goody, a music and video outlet.

Among the heavyweights in the South Bay’s street-corner music and video battle is Wherehouse Entertainment, a 340-store chain based in Torrance.

Next month, Wherehouse will debut its 23,000-square-foot superstore, the largest in its chain. At almost four times the size of the current store, it will expand its selection to 80,000 compact discs and 30,000 rental and for-sale videos, and also offer more CD ROM discs, video games, used CDs and audiotapes and books.

“This is clearly the super of the superstores,” said Wherehouse Chairman Scott Young. “This is going to be the best we know how to do. Under one roof, a very good store is an attraction and is enough of a draw that people will go out of their way to come to it.”

Inside, customers will see partitioned areas for separate music segments. For example, a neon-lighted jazz section will feature an expanded inventory of artists. A theater marquee will tout the latest home-video offerings.

Also featured will be a stage for live performances and CD listening posts positioned throughout the store, so customers can hear music samplings and browse at the same time. In the works are video monitors for customers to sample tapes before buying or renting.

Company executives say that with innovations in home entertainment on the horizon, making music and video stores exciting is crucial. Interactive television and the 500-channel TV universe soon could enable viewers to call up movies and TV series from their phones. Expanded channels of home shopping could include an array of music selections.

“We have to make the experience of coming to the store part of the entertainment,” said Wherehouse spokesman Bruce Jesse. “We’re trying to make the experience more involving, more interactive, than for them to just sit home, take a catalogue and check off what they want. As we move forward, we have to make that experience kind of unique.”

Not to be outdone, the Music Plus store in Torrance is also due for a major expansion. Blockbuster Entertainment Corp., the Ft. Lauderdale, Fla.-based video retailer that bought out the 95-store Music Plus chain last year, plans to double the inventory of the store. The outlet, to be renamed Blockbuster Music, will also include partitioned areas for different music segments.

“If you are a country music fan, you don’t have to pass through ‘Headbanger’s Ball’ to get there,” said Jerry Weber, Blockbuster’s senior vice president of operations. “What we will be doing is broadening the appeal.”

Blockbuster, through its NewLeaf Entertainment subsidiary, has a venture with IBM in which compact discs could be made for customers on demand. It would give nearly instant access to CDs that might otherwise be out of stock. The service, believed to be several years away, will be marketed to all music retailers.

Said Weber: “If you want Van Morrison’s ‘Moondance,’ and it’s not available, we would manufacture it at the spot.”

Such new technology has not been announced yet for Tower Records & Video, which opened a 14,000-square-foot store across the street seven years ago. While it plans to add more CD listening posts, company executives insist it is well positioned because of its extensive inventory of 80,000 CDs, 30,000 audiotapes, 7,000 for-sale videos and 500 video games.

“It’s the depth of catalogue that we have,” said Mark Newman, the store’s general manager. “For example, we’ll carry all Willie Nelson titles, not just his latest. We try to carry everything we can. It doesn’t matter what it is, we carry it.”

Tower’s store features a flashier design than many record and video outlets in strip centers and indoor malls. Customers walk into a main foyer, lined with separate rooms for general music, classical and home video.

The store now has annual sales of about $6 million, and ranks among the top 20 in revenue in the 80-store, Sacramento-based chain, said Stan Goman, senior vice president of Tower.

Not all those embroiled in the Torrance music and video scramble can afford to compete on the superstore plane.

Funkytown Records, just around the corner from Wherehouse Entertainment, is trying to find a niche by offering hard-to-get vinyl records. Vinyl discs have all but disappeared in chain stores, having largely been replaced by compact discs. Such popular 1980s selections as Bruce Springsteen’s Born in the USA and U2’s Rattle and Hum can be found in the racks. Funkytown also carries a large selection of dance, techno and rap vinyl discs that customers can’t find at other stores.

“The deejays, they prefer vinyl,” said Charlie Ann, the independent store’s owner. “As long as they want it, we will sell it.”

When the new Wherehouse opens, Ann plans to expand his selection of music merchandise, such as framed posters and artwork and T-shirts, and to increase the volume of imported compact discs.

“We try to specialize in something they lack and bring more business to the area,” Ann said. “We’ve been getting a lot of customers from Wherehouse and Tower.”

In fact, all retailers competing in Torrance’s intensifying music and video fight expect to prosper. The store expansion projects and high-tech retail services, they say, will attract many more customers to the area.

“What will happen is the whole industry will expand in that area,” said Tower’s Goman. “It’s not going to put anyone out of business.”

Record Row A busy Torrance intersection has become the site of unusally intense battle among four stores in the music-and-video entertainment business. The players: 1.Tower Records 2. Wherehouse Records 3. Music Plus 4. Funkytown Records 1. Tower Records & Video Prides itself on extensive video and CD selection; separate rooms for video, general music and classical sections; entertainment books and magazines; soon to have headsets storewide to sample CDs. 2. Wherehouse Entertainment Expanded superstore, to open this month, includes headsets to sample CDs while browsing through racks; stage for live performances; and eventually, TV monitors to sample videotapes. 3. Music Plus Standard-size store, but new owner, Blockbuster Entertainment, plans to renovate and rename Blockbustrer Music. The new store will feature an expanded inventory, and may include Blockbuster’s proposed CDs on demand to give customers access to a library of out-of-stock titles. 4. Funkytown Records Specializes in vinyl albums and 12-inch singles: imported CDs, mainly from France and Italy; music-oriented T-shirts and posters.