Update 20th July
The music retailer HMV has said it is hoping to open 10 new stores this year as it continues to put its faith in the High Street. The plans include a search for a new London flagship site.
This is quite extraordinary given that the supermarket Sainsbury's have stopped selling CDs and DVDs saying peope are consuming music online. However, it is likely that the the "stores" will be more like "venues" and will be more of an experience in music rather than just a traditional record shop of old. That said no doubt they will be selling vinyl as they become more popular.
HMV has been bought out of administration by Sunrise Records, the Canadian record store owned by the mogul, Doug Putman. Over 100 shops will remain open and 1,200 jobs will be saved. He fought off competition from Mike Ashley who already owns large swathes of the High Street brands. Unfortunately it has been announced that the flagship store in Oxford Street will be closed.
List of stores to close.
- Bristol, Cribbs
- Exeter Princesshay
- Bristol (Fopp)
- Glasgow, Byres (Fopp)
- Manchester (Fopp)
- Oxford (Fopp)
- Glasgow, Braehead
- Manchester, Trafford
- Merry Hill
- Oxford Street
- Peterborough, Queensgate
- Plymouth, Drake Circus
- Sheffield, Meadowhall
- Tunbridge Wells
- Westfield London
Putman said he believed HMV would be around in the UK for a long time. Speaking to BBC Radio 4’s Today programme, he said: “We believe it’s a chain that’s going to be around ... the customers love it. We get amazing support, which is great. So I think this is a very long road ahead.”
If HMV had a very poor Christmas trading period then it is almost inevitable that the company will go into administration or try a company voluntary arrangement. It has been reported that KPMG have filed a notice of intention of appoint administrators. The firm currently employs 2,200 people and this will be the second time in 6 years that the business has gone into administration. They will become the first post-christmas victim of the high street!
Online sales of downloaded music and videos have soared in recent months. It was only last month, that the company announced they had seen a 10% decline in sales.
HMV's management have been making lots of changes to try and turn around the company with new store designs and product ranges. They have survived for longer than was expected in early 2018, despite massive debt of £176m. They have sold off their live music business and extracted better terms from their suppliers in exchange for some equity.
Hilco, which this year bought Homebase, purchased the group's debt and acquired the business in a £50m deal.
Music industry sources said the rise of streaming services had "decimated" HMV's business and made its future operation unsustainable.
Brexit has been said to have much blame, yet it should not be suggested as the only cause. There are many more forces at play.
Management are rumoured to be in talks with leading music industry firms to seek financial support. However, such talks are said to be looking unsuccesful.
Hilco and KPMG both fail to comment