First it was Elsie's, and then the Out of Town Ticket Agency. Now yet another small Harvard Square store has closed in the face of heavy competition from bigger chain retailers.

Discount Records, a music dealer formerly located on JFK Street, shut its doors for the final time last week, to the disappointment of many students.

Cameron B. Sheldon '99 said he liked Discount's "really friendly student-based atmosphere, something that the other stores just don't offer.

"It also wasn't as crowded as the other stores -- which is why I guess they went out of business," he said.

Brett L. Billick '98 said the demise of Discount Records "stinks."

"I found it had good music that I liked," he said. "It was just the most convenient place."

Meanwhile, many of the national chains that moved into the Square have experienced a year of successful sales, according to supervisors at the stores.

HMV, one of the largest music retailers in the Square, has seen high profits since the Christmas season, despite projections of low sales during these months, according to Dermot Smith, a supervisor at the store.

Tower Records, also part of a nation-wide chain, has shown profits which exceed those in corresponding months from previous years, said supervisor Amy Russell.

But while larger stores are proving low-profit predictions wrong, smaller music stores are feeling the pinch.

An employee at Newbury Comics, which sells books, comics, compact discs and tapes, described past months as busy, but said recent sales were only "mediocre" at best. The employee, who spoke on condition of anonymity, attributed the low sales not only to competition from the larger music stores but also to a generally slow retail season.

An employee at In Your Ear, another small music retailer, reported a similarly unremarkable "so-so" retail season since Christmas.

The Coop's music department has also seen low profits for more than two years, and, according to one employee who requested anonymity, sales have "been pretty flat" since Christmas.

In two weeks, the Coop's music department is slated to shut down for a major renovation as part of the store's change of management to the large retailer Barnes and Noble. The Coop's music department will not reopen until October.

The high competition in the music retail business stems from the nature of the clientele, according to Smith.

The teenagers and twenty-somethings who form the mainstay of the customers of music retailers are willing to go to several stores to compare prices and get the cheapest deal, Smith said.

Managers at some of the larger retailers said the stores have developed tactics to lure in younger customers, giving them an edge over the some of the smaller stores.

HMV has a liberal return policy which allows consumers to return albums accompanied by a receipt. According to Smith, this provision helps to attract young customers.

Tower Records' management has adopted a "Top 1000" list of popular selections on sale for discount prices, as well as a "feature of the month" album that sells at an especially low price, Russell said. New displays and posters have also helped bring in the younger crowd, she added