HMV in trouble?

[SiHart]

http://www.telegraph.co.uk/finance/n...e-for-HMV.html

Like-for-like sales at its Waterstone’s book chain fell by 3.2pc over the first half of its financial year, while sales at the HMV chain fell by a whopping 16.1pc. Pre-tax losses widened to £41.3m from £24.9m last year, debt leapt up to £151.6m from £88m and the dividend was halved.

The City found the figures more discordant than a Melvins concert - shares in the retailer fell 11.5 to 32.25p this morning.

While HMV Group always makes a loss in its first half - it sees 60pc of its annual sales over Christmas - there is no disguising how terrible these figures are.

Simon Fox, chief executive, was putting a brave face on things. HMV Group has said for a long time that the internet has totally changed the way that people consume music and to a lesser extent books. It is therefore moving into new areas like clothing, electronics, live music and cinemas, while also building its own online sales platform.

However either HMV is moving too slowly or the market is changing too quickly. If January’s trading update is as poor as this one, then serious questions will be asked about HMV’s strategy, its management and its status as a public company. Wouldn’t life be easier if it was taken private and run for cash?

Meanwhile the diversification continues. HMV is buying new venues and music festivals for its ‘live’ division. Next summer it takes over the running of the upmarket Cornbury music festival in the Cotswolds, a favourite of David Cameron’s. And plans are advanced to buy the Ritz in Manchester, where The Beatles, The Stone Roses and The Smiths have all played.

That famous venue was managed in the 1960s by one Jimmy Saville. Can live music fix it for HMV? Possibly. But if the current deterioration in its core categories continues, it might be too little too late.

It's not doing well at all if it can't compete when there are no competitors on the High Street...

Si xx

[Si Hunt]

That's life isn't it? We can't keep milkmen and chimney sweeps and rag and bone men in work for traditions sake, and the high street music retail store is becoming redundant. You can't expect people to pay £12.99p for a CD they can order on-line for £7.

Aside from that, although I like HMV in some ways (some of the music accessories, T-Shirts, magazines, novelty items are fun; the occasional good reduction) they suffer from the kind of careless exploitivenss in pricing that makes me cross - ok, they are selling CD's for £12 instead of £7 because of store costs, but then you get erratic pricing on older titles that sees them slapped up as £17 or more. It annoys me because I picture older buyers, maybe clutching a birthday or Christmas list for a younger relative, getting ripped off because they don't know the same title is cheaper accross the road.

Si.

[WhiteCrowNZ]

I have fond memories of trying to chat up the girls in Our Price. The ones in HMV weren't so hot - so let it burn down I say!

[SiHart]

I quite agree Si. They're pricing themselves out of the market, which is ironic when they are the market, since all their competitors have just about gone. I personally rarely buy anything in the shop, unless it's a real impulse buy because I know it will be far, far cheaper online. If they matched those prices I'd be happy to shop in their stores.

Si xx

[Jon Masters]

Apart from the odd deal or sale, HMV are consistently the most expensive shop on the high street for CDS and DVDs.

I have never seen a DW DVD in HMV at less than RRP.

Good riddance !

[Larry]

That's life isn't it? We can't keep milkmen and chimney sweeps and rag and bone men in work for traditions sake, and the high street music retail store is becoming redundant. You can't expect people to pay £12.99p for a CD they can order on-line for £7.


Si.

even less in a lot of cases over the last year I've bought dozens of cd's from Amazon, to down load onto my i-pod and quite a good few of them only cost me £3 or £4. Certainly for me because I don't have a local HMV, more often than not I buy my DVD's and CD's from Amazon, simply because I can't be bothered to go into Reading or Bracknell. I'm sure there are many people like me who find it much easier to buy from Amazon, so HMV, like many shops has just become or could become another victim in the growing trend for online shopping.

[Dirk Gently]

The last time (& only time in about 3 years from memory) that I've bought anything in HMV is because I was given a voucher card. So technically I wasn't 'buying' but exchanging. I usually use Play.com. I use the link that is still connected to PS.

[Si Hunt]

I can understand terms such as "under attack" being used on the news re: HMV vs on-line shopping, but no-one ever said HMV and Our Price were "attacking" each other. These places exist to serve a demand, and since always the ones who lose their demand to a competitor die out. Who exactly are we supposed to be feeling sorry for in this situation? Most of the staff are temporary workers, so the HMV/Waterstones shareholders?

Larry has a good point, Amazon Marketplace is a great place to get hold of other peoples second hand CD's for bargain prices. I don't see any similar scheme being launched in HMV (maybe a buy and exchange scheme for cashing in your old CD's for a discount off newer releases?) nor any attempt to allow purchase of digital tracks in-store. Just what have they done to keep up with the changing times?

Si.

[SiHart]

Nothing. Until very recently you couldn't buy downloads from their online store, let alone in their shops.

Si xx

[Perry Vale]

but then you get erratic pricing on older titles that sees them slapped up as £17 or more.

Trust me, there's nothing erratic about their pricing that I've seen. They have a mark-up (the same on all back catalogue), which is applied to a dealer price. A dealer price set by the record company....

Sort of sad about this (as it was the industry that employed me for 20 years), although I would mention that from the report I heard on the news, the fall in profits was due mainly to a drop in the sales of games, not music.

[Rob McCow]

They've lost the 'collectors' market to the internet - by that I mean people who want to buy CDs that are more than a few years old and didn't chart too highly - but far more important, the supermarket chains have a complete stranglehold on the new releases market.

When you think of grannies buying CDs for the kids, they're not even going to go into HMV these days, they'll pop it in the shopping basket with their sausage rolls and brandy*. What's more, they'll save themselves two or three quid by doing so; the supermarkets don't undercut HMV massively, but they are consistently cheaper. The same is true for DVDs, Blu-Rays and computer games.

It's true that HMV do the occasional in-store signing or concert, but these are concentrated around one or two stores, mostly in central London.

If I were HMV, I would take the following steps:

Trial 'Micro' stores. These would be catalogue-style shops were people could browse for music on monitor screens, then either download them directly or pick up the CD from behind the counter. There's no need to have miles of floor-space devoted to racks of CDs. The same could work for DVDs.

Get bands to do signing (not singing!) tours. Imagine if Hot Chip came to Bracknell! Or if you could meet Florence + The Machine in Bluewater! I think that people would go even if they weren't performing, just to get the signatures. It would also bolster the physical sales - how do you get a signature on an MP3? Well-publicised signing tours would be a good way to improve sales in all their stores.

The HMV 'Points' system is a total waste of effort. I can't imagine anyone getting enough points out of it to get something decent. If they want to make an impact, they should sign up with Nectar.

Abandon clothes, books, toys and cool stuff! HMV's core market is music, so they should become more specialist. They should work out a system of recommendations - perhaps they could do this with the reciepts, so that when you get a reciept in store, it examines your purchases and tells you what other music you might want to listen to.

Get in bed with Spotify. Buy up all the ad space so that people will be constantly badgered to buy CDs that they're listening to for free.

Jeez, there are so many opportunities it's ridiculous, but they're just plodding along in the same old way - doooooooooooooomed!

*Not all pensioners eat sausage rolls and drink brandy.

[SiHart]

*Not all pensioners eat sausage rolls and drink brandy.

It's true. Some like Gin.

Si xx

[Si Hunt]

I agree with Steve, except for the 'cool stuff' bit. To be honest, quite often I pause outside HMV and wonder what I'm going in for.

One reason might be to look at the reductions, another might be the "cool stuff" - if there's T-Shirts, magazines, accessories, that sort of thing it's worth a look.

But I also want to be able to go in, dock my iPhone, and download a track by swiping my credit card. Why can't I do that? I spend time in the mornings doing that, so I think if I could go in, operate a wall-mounted screen, Youtube a song, and then buy it by downloading it to my player, then I would.

Singles are a good avenue, since the physical format became redundant they have dissapeared from the high street completely; why haven't they been replaced. Again, we need some kind of downloading system.

Maybe I'm being unrealistic. Maybe that technology would cost thousands to develop and be of limited interest. But that's how I, as a consumer, purchase music, so I want to be able to do that in HMV if HMV are to have my business.

Si.

[Stuart Wallis]

*Not all pensioners eat sausage rolls and drink brandy.

This is true. I tend to eat brandy and drink sausage rolls. I have peculiar dietary requirements.

I also have a tendency to browse round HMV. At their prices, I should cocoa! most of us agree on that.The last thing I bought in there was on the understanding that it was going to be signed by the Goodies later in the day, and that was the only reason I was going in any branch that week. (Even then, it wasn't the most organised affair.)

This, I should point out, was in one of the Oxford Street branches. Work this one out - they have a branch in the Tottenham Court Road end of Oxford St., another in the Marble Arch end, and a third competing with both of them practically in nearby Leicester Square. Isn't this a case of "And I'm cutting me own throat guv"? If it isn't it's near as dammit globalisation. Well it would be if that part of London weren't crawling with so many second-hand record, CD and DVD shops that are largely undercutting them.

Ah well. As a whole, good luck to them. I'd say that to any firm to whom the Internet is undercutting. The Web's fine for the consumer, but longterm, maybe not so fine for shop assistants' jobs, as former employees of Woolworths and Zaavi will contest...

[WhiteCrowNZ]

I think the thing with HMV is we always felt a bit ripped off by them anyway - and we've seen other shops we were more fond of go under. Looks like the future of shopping then is going to either be the ASDA or Tescos ULTRA-MEGA STORE.

[Stuart Wallis]

And one wonders whether we may be eventually be ripped off by them eventually? But that's another story.

[Rob McCow]

There's a worry that we are heading towards a supermarket stranglehold on all products - that when the high street stores have passed away, the prices of everything will start ramping up. It's hardly inevitable, it may never happen, but it's possible.

[Stuart Wallis]

That's what I was hinting at.

[Perry Vale]

There's a worry that we are heading towards a supermarket stranglehold on all products - that when the high street stores have passed away, the prices of everything will start ramping up. It's hardly inevitable, it may never happen, but it's possible.

I'd say it's inevitable. We've already seen the start of the next step with the cutting out of the supplier with 'own brand' products....

[Alex]

Surely it won't matter though, as you'll still be able to buy records online, be it in physical or mp3 format. I can't remember the last time I bought an album or dvd in a shop now, it's just so much easier to do it that way.

[Larry]

I bought thecomplete series 5 box set with the lenticular sleeve from HMV and it cost me £69 that's £20 more expensive then what Amazon are charging. Now you expect a £5 to £10 difference but £20 is just ridiculous and it's no wonder HMV are struggling against the on line stores, my mum has bought me the blue ray version of Avatar, for christmas she paied about £25 for it in HMV, I then saw the same copy in Tesco for under £20.

Even their 2 for £10 offers on cd's are nothing great ok they throw in the odd big selling popular CD's but in general most of the stuff is from people I have no interest in.

[Llordllama]

Going to HMV used to be a real highlight of my weekend in Sheffield/York/London but I'm trying to remember when I was last in one? I think I was in the Leicester one a year or two ago, and just couldn't beleive the prices they were charging for stuff. Play/Amazon get most of my traffic these days.

[Rob McCow]

I popped into HMV this morning, trying to get a hold of some nice, Christmas-ey Blu-Rays for us to watch. After some debate, I settled on National Lampoon's Christmas Vacation and It's A Wonderful Life, both labelled as being 2 for £25.

I got to the till and the guy couldn't put them through as 2 for £25. So I told him to sod it.

As far as I care, HMV can shut down. They're f***ing useless!

[Larry]

I went into the Bracknell, branch today to look for any of the NCIS, series box sets I took one look at the queue which was going half way down the shop and turned round and went straight out again. TBH, i'm not sure why I even wanted to buy any from HMV, when each series set is about £10 on Amazon - I very much doubt HMV are selling them at that sort of price.

[Philipnet]

I popped into HMV this morning, trying to get a hold of some nice, Christmas-ey Blu-Rays for us to watch.

I got to the till and the guy couldn't put them through as 2 for £25. So I told him to sod it.

You should have asked if you could take them for £20 and see what he said