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HMV calls in the Administrators

By Chris Dawson January 14, 2013 - 11:14 pm

In the latest blow to the High Street, HMV has called in the administrators, which puts their new marketplace into jeopardy, not to mention the livelihoods of some 4000 employees in shops up and down the country and at head office.

This is the second major retailer to go to the wall in 2013, Jessops, the camera retailer, threw in the towel earlier this month with about 200 stores and more importantly 2000 jobs at stake.

HMV issued a statement saying “On 13 December 2012, the Company announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.

Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, the Board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect.

Will HMV’s problems be blamed on Amazon and other online retailers? Possibly, but more likely Apple and iTunes are more to blame. Downloads have been counted towards the official top 40 music charts since 2004, a couple of months after iTunes launched and every time a download is purchased that’s one less sale for shops such as HMV. Add to downloads the cut price deals offered by supermarkets and the CD market isn’t a great place to be.

DVDs are also under pressure with services such as LOVEFiLM, Netflix and even Virgin Cable and Sky making movies available on demand. Games could also go the same way with streaming media and downloadable content.

Is there still a place for a major media seller on the High Street? Definitely if HMV goes it will be something that music fans across the country would miss. Sadly though, if media shops can’t make money, it’s quite possible in a few years time the only place you’ll be buying CDs will be online or at the supermarket, or of course streaming or downloading your music instead.

Out of interest how many CDs or DVDs did you buy on the High Street in the last year? I know I purchased a ton online, a couple in the supermarket, and none in HMV.

  • 9 years ago

    The supermarkets took a lot of their trade and as far as I know they all still do well from media.

    HMV were overpriced for too long, even this last Christmas when they should have been trying harder they were not pricing competitively.

    I suspect a couple more big names will be going over the next few weeks. I read information earlier today that Ethel Austin are once again having problems (the fifth time since 2008!).

    • Clarky
      9 years ago

      That is true, all stores were shut at Midday on Friday when security staff went in to secure stock etc.

      The shops themselves hadn’t had deliveries for a few months. Shame for the staff but from what I know it was badly run from the start.

    • puddleglums rest
      9 years ago

      a lot more big names will go down the pan,
      as many high st names are now only showrooms for Amazon and ebay

  • Casie
    9 years ago

    HMV lost my custom due to their lousy returns policy. My mum bough me a dvd from there last Christmas. I tried to exchange it for the Blu-ray version. They wouldn’t let me change it. Now I know legally they don’t have to but it really annoyed me. The dvd was still in it’s shrink wrap and we had the receipt. The staff just kept pointing to the returns policy on the wall behind the till, but my mum said that was not something she had noticed or had pointed out to her when buying the film. In the end my mum kept the dvd and bought me another copy on Blu-ray but from Amazon. This Christmas she bought all the families cds, dvds and xbox games on Amazon.

    • puddleglums rest
      9 years ago

      if we buy anything at a store we buy it in the car park on our smart phone then collect it in store , the distance selling regulations are much more return friendly lol

    • Gary
      9 years ago

      Buy Curry’s stuff online instore on the Apple computers and collect instore. Unlike the rest of their PC display models the Applemacs in their own little section normally have full web surfing capabilities. BIG savings to be made if you visit Curry’s and want to take home.

      On the “collect instore” thing are the return policy regulations the same as home delivery?

  • puddleglums rest
    9 years ago

    high st retailers are a thing of the past, when you can order an item for less before supper and receive it at breakfast while sitting in the comfort of your lounge,

  • Jimbo
    9 years ago

    At one time flicking through vinyl in a record shop was one of my great joys. I remember when the first larger stores came out (“our price”) then the mega stores. Now history.

  • Stuart
    9 years ago

    HMV had lots of issues, mainly changes in position and at the top as well, they ended up a bit like Woolworth’s trashing about not knowing what to do to stay alive, rather than sticking to something and pushing on with it.

    One of their biggest issues is they have big stores in shopping centres, they need to pull them and go out on the cheaper high street and become more specialist and try to actually sell CDs and DVDs to customers rather than just stacking them on the shelves.

    I hate to say it but all the small, specialist shops they pushed out of the market is something they now need to become.

    They were also way to slow to adopt online and streaming services, instead of buying Waterstones they should of bought Love Film!

    I don’t think they will go altogther, there is still a place for them, there is always a massive que in our local store that is for sure!

    Also glad I spent by £50 voucher that I had for Christmas on Boxing Day as I thought this may happen.

  • Gary
    9 years ago

    HMV will no longer accept gift cards. This has to be the death knell of the gift card.

    Totally wrong that stores promote these and take money up front from customers knowing that there is no obligation to accept them in exchange for goods in the event of administration.

    And totally wrong that ebay are still permitting these to be sold on ebay!

    Currently 27 HMV gift cards on sale with 43 bids in total.

    • Tony
      9 years ago

      What he said. I will never, ever again buy a gift card that is dedicated to a particular store. A book token, maybe (you can use them more or less anywhere) but never a gift card.

      Oh and I have heard that Tesco accept HMV gift cards….you tell them it stands for ‘Horse Meat Voucher’.

  • steve
    9 years ago

    cannot have been easy for them when their main competitor pays no tax

    • puddleglums rest
      9 years ago

      plus, a business that has retail B&M outlets pay UK business rates which are a form of mansion tax, so if your online you can avoid those too

    • steve
      9 years ago

      good point

    • Stuart
      9 years ago

      Last time I checked you still pay business rates on warehouses etc, plus if you work from home you should be paying some there to!

    • puddleglums rest
      9 years ago

      still in effect a mansion tax for such as HMV on prime high st premises, the business rates must be astronomical

  • mw
    9 years ago

    Like everything else on the High Street….. Use it or loose it.

  • paddy
    9 years ago

    This is sad but enevitable news. I bought some DVD’s in HMV just before Christmas but before then it must have been years since I had bought anything in store. I suppose this is part of the problem. I like the idea of going into the shops and seeing what they have for sale but rarely make any purchases.
    I did like the idea in HMV where they set up a number of games consoles for people to play on. I think if they had expanded on this much more and exploited GAME’s woes they might have had a better chance of solvency.

  • 9 years ago

    Sad day for HMV and for music lovers. I personally enjoy shopping trips to HMV as it’s a great shop, well laid out and has a terrific selection of material with a few good bargains. That said, to answer your question Chris I rarely purchased from HMV over the last few months and if I did buy anything it would be an impulsive purchase or something that I knew was on special offer (Complete box set of 24 for £35 and the 6 Rocky films for £10 – amazing!)

    I think record shops really have to offer a digital product, even if this means having portals in the store where shoppers can download directly to their mp3/tablet devices at a discount (e.g. in Apple’s case 99p for an mp3 but 59p if you bought it in the Apple store and therefore increased footfall in likelihood of purchasing other products)

    I feel really sorry for all the staff members who will lose their jobs over this and it’s actually really worrying to see so many high-street employers going to the wall. I wrote a piece on it on the Seller Dynamics blog so please feel free to share and comment.

    http://sellerdynamics.wordpress.com/2013/01/15/hmv-the-day-the-music-died/

  • Clarky
    9 years ago

    I was in the Trafford Centre the other week and got slightly lost (as I usually do) and of course ended up in the food court. On my way I was looking around and came up with the following:

    The only type of store in the shopping centre was either fashion, food or services (mobile phone etc)

    There was very little of anything else and it got me thinking why?

    Answer seems to be that the margins of food and fashion can withstand the rates/rent and services can afford to run a store at a loss as long as they bring in subscribers.

    It does speak more to the b&m commercial landscape as a whole!

    • PayPalUser
      9 years ago

      You must have missed the following shops:

      Apple
      Currys/PCWorld
      Game
      ModelZone
      Watersones
      WHSmiths
      Disney
      Nespresso

      Plus the travel agents, chemists etc etc

  • Tony
    9 years ago

    What he said. I will never, ever again buy a gift card that is dedicated to a particular store. A book token, maybe (you can use them more or less anywhere) but never a gift card.

    Oh and I have heard that Tesco accept HMV gift cards….you just tell them it stands for ‘Horse Meat Voucher’.

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