Licorice Pizza, a Southern California record and video store chain that got its name from a 1960s record album, is being sold to the Musicland Group, the nation's largest specialty retailer of records and tapes.
Musicland, a unit of American Can, said Tuesday that it agreed to buy the Licorice Pizza outlets and 26 other record stores for $13 million.
The purchase of the 34 Licorice Pizza stores gives American Can's Musicland Group an entre into the lucrative Southland home video rental market. Only 40 of Musicland's 452 stores rent videos, but the group wants to expand its rental business.
"We're very interested in being in that market," said Jack Eugster, chairman of the Musicland Group.
Licorice Pizza started renting videos three years ago and now derives a large part of its sales from that business. Records now account for just 30% of the chain's sales.
Licorice Pizza, based in Glendale, opened its first store in Long Beach in 1969. Founder James Greenwood borrowed the company's name from remarks made in a comedy sketch on an album by '60s folk singers Bud and Travis. The entertainers mused about sprinkling their records with sesame seeds and selling them as licorice pizzas.
"Jimmy thought that was funny and that it might make a good name for a store," said Ruth Sims, senior vice president and general manager of Licorice Pizza.
Greenwood, who operates the Santa Monica-based Aahs! gift store chain, sold Licorice Pizza last March to Record Bar Inc. of Durham, N.C., for an undisclosed amount. Twenty-six Record Bar stores, located mostly in the Rocky Mountain states and the Midwest, were included in the Musicland sale.
Musicland said the Licorice Pizza stores would retain their name. When the purchase is closed, Musicland will have 52 stores in the Los Angeles area, a spokesman for Minneapolis-based Musicland said.
The Record Bar stores involved in the transaction will be converted into Musicland stores, Musicland said.
The Licorice Pizza and 26 Record Bar stores had combined sales of $50 million last year, Musicland said.