It’s finally happened. Mid-evening on Monday 14th January the UK’s last remaining record store HMV announced that it’s shares would stop trading on the stock exchange and that it would appoint administrators Deloitte to take the reins as it seeks to find a potential buyer for the business.
It was only last week that I predicted that there was very little time left for HMV to turn it’s fortunes around. It now joins Jessops as the second major retailer in two weeks to put the final nail in the coffin. HMV employs up to 4000 people in the UK, and unless a buyer is found quickly, they all look very likely to go.
Over the past couple of years, HMV has sought to right it’s ship by selling off it’s chain of book stores (Waterstones), it’s collection of live music venues, it’s foreign businesses such as it’s chain in Canada. It sold/closed some stores last year and re-fitted many in an attempt to boost it’s books, but it’s clear that this was all in vein.
Key dates in the history of HMV:
1921: The first HMV shop opened in Oxford Street, London. The shop sold sheet music, recording, and HMV-brand gramophones.
1962: Beatles manager Brian Epstein brings a demo tape into an HMV store leading to the group being signed by HMV joint owners EMI
1977: EMI decided it was time to expand further and acquired the Savile Pianos chain. The chain owned 39 stores across the UK.
1984: Bob Geldof opened the world’s largest music store: HMV Oxford Circus.
1995: HMV Group bought book retailer Dillon’s.
2002: HMV Group floats on the London Stock Exchange
What I find puzzling, is that the high street stores that have closed in the last 18 months must have been able to see the changes to the way we spend money coming. Take the rise of online outlets like Amazon and iTunes. Year after year their music sales and downloads have risen. Every year. Without fail. People spending more and more of their money on these internet based companies. Yet despite these very obvious slaps in the face, very few high street retailers changed their business models. Those that have have done it far too late and have gone to the wall. The one that MAY have just got away with it is Argos, which will now be using their stores as collection points for a more web-based click-and-collect business. So despite clear warnings from quite a few years ago now, HMV has almost blindly walked into this dire situation they are in now.
Like Jessops, like Comet, I am going to predict that HMV will not be bought. Why would they? The modern music buyers are now split into two categories. The first, the iTuners who have no desire for stacks and stacks of CD’s cluttering their homes and would prefer everything on their device on in the cloud. The second, the Amazonions who still prefer CD’s but have realised they can save quite a few pounds when compared to HMV, and have it delivered to them. What’s better, if they do want to download something, Amazon has that service too. Both these companies have seen enormous rises in sales figures year after year. So bearing that in mind, why would anyone by a chain of stores when it’s market place is shrinking quickly year on year?
It has been mentioned that there is a remote chance that the stores could be bought and turned into click-and-collect centres. But who would really go to the trouble of ordering a CD online, to then go and have to pick it up in town? It’s just a CD, it’s not worth all that effort. You would just download it, or order it to be delivered. It’s not like Argos in the fact that you can order almost anything and everything. Argos is a business which can justify a CAC business model.
I have been following HMV’s story of strife over the last couple of years and it’s sad to be having to write a post like this.
Unfortunately, at this time of year and given the state of the high street, I just can’t see a buyer being found for HMV. It is a real shame, and I feel quite sad at the prospect of the chain going. I have spent, by my reckoning at the points I collected on my HMV card, at least £2k in there over the past few years, on CD’s, DVD’s and a couple of PlayStations. But the world has changed, unfortunately HMV didn’t. It looks like that after nearly 100 years, His Masters Voice looks set to fall silent on the UK, with the loss of 4000 jobs.