Who said that the internet was going to kill off HMV?
Err.. lots of people! They went into administration in 2012 and were bought out in a last minute deal by Hilco who paid around £40m to buy out a syndicate of eight lenders – including Lloyds Banking Group and Royal Bank of Scotland – to be left as the sole secured creditor to HMV, leaving it in a powerful position to take control of the retailer.
An employee tweeted the mass sackings at head office and said that they "never got" social media. Ok, HMV has had to be restructured and a number of outlets shut down but what a job Hilco have been doing. It now transpires that sales at their stores are up a staggering 14% with Vinyl and CDs up 21% in the last 2 months and they are now just behind Amazon as the number one entertainment retailer in the UK.
So what have they done?
The brand was very strong and so they have capitalised on that. They have gone "back to basics" and stopped selling Ipads and tablets but concentrated on music, t-shirts etc. However, one tactic that has pulled the shoppers in has been live music in stores. This is a win-win situation for the bands, the record companies, the shop, and the fans who have been able to get up close and personal with the acts.
It should be remembered that HMV is only half the size it was before it went into administration, but the reopening of its flagship store on Oxford Street shows they are making a serious comeback.
Interestingly, for all digital's advances, physical formats still account for more than half - 56% - of all sales of music, video and games in the UK.
So administration does not mean the end of a business but can be a rebirth under new ownership. The first aim of administration is rescue!