What next for HMV?

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News that HMV’s like-for-like sales were down 8.2 per cent in the five weeks to the end of December may have surprised those sitting around the HMV boardroom.

But those of us on the outside were not so shocked.

HMV’s slow and painful decline has been excruciating to watch across its once key markets of music, games and video.

The latest ‘strategy’ to move the business’s focus to technology hardware is yet another mistake.

The market which it is now waltzing into is already crowded and the cruel economic reality has claimed many a scalp.

You only have to look at the recent difficulties experienced by Comet, Currys and PC World to know that this is a clumsy attempt at a recovery.

I’m sure there has been ‘growth’ in the sale of technology products, but that’s because it is offering more of them.

As for the decline in music and film sales, this can be attributed to a clumsy approach to digital and an unwise rationalisation of what is on offer in store.

I recently stopped by a store in Moorgate, London. It was a horrific experience. I had money in my pocket and was looking for a gift for a friend.

In the old days, there would have been a wide selection of music, films and games but all I could find was iPod accessories and T-shirts. Is it no wonder then, that so much of HMV’s footfall turns around and disappears back home to buy something online.

The worst thing about it is that, for my generation, HMV has huge brand value – even today – it is just the approach to the business that needs a second look.

First of all, most of its stores should be closed. The rent is costly and many of the sites are not justifying their existence any longer.

That said, there are a tiny number of sites (and I mean a dozen or so) which do still hold significant value.

I was recently departing from a London airport and couldn’t help but notice that HMV was selling CDs. I say selling, the store was empty but that’s not the point.

A better use of the remaining sites at airports, railway stations and ports would be to refocus on music, video and games and offer instant downloads to MP3 players, tablets, laptops for those embarking on a journey.

There might be room for some accessories (earphones, travel pillows, etc) too. That’s where the value remains.

All this technology nonsense is taking a perfectly good brand down a dead end from which it will never escape.

It genuinely pains me to read the constant criticism of what was once an exciting business in the press, but the management seriously need a rethink.

Joe McGrath is editor of Insolvency News

Posted on 12th January 2012 by Joe McGrath

 

 

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