Deathwatch: Profits warning from HMV as things get worse for Nipper the dog

1 March 2011

retaildeathwatchStruggling entertainment retailer HMV has tottered closer to the retail abyss today with yet another profits warning, coupled with the admission that it is on the brink of failing to meet the terms of its loan agreements next month.

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HMV Group have said that they’re trying to renegotiate loan terms but have said that “…the group now expects that profit before tax and exceptional items for the financial year will be moderately below market expectations”. Back in January, it announced that 60 stores would close, in the wake of a rotten period of Christmas trading.

They have also announced that its net debt is expected to be not less than £130m - double the £67m it reported in April 2010. A sell-off of the HMV-owned Waterstones is now predicted but whether that will be enough to save the ailing HMV Group remains to be seen.

In these days of supermarkets selling CDs, DVDs and games and with the likes of Amazon and Play firmly established as an entertainment retail alternative, would any of us even miss HMV all that much?

TOPICS:   Debt   High Street News

19 comments

  • klingelton
    and even in the closing down sale - CDs and DVDs will still cost aprox 2x the price they do at amazon/play... That's why they're failing - highstreet retail costs too much.
  • Raoul H.
    High street retail doesn't 'cost too much'. It is just that online retail is cheaper -- large volumes, no high street rents, no large numbers of staff, no expensive cash to handle, no complicated distribution or logistics, etc. I am sure that, being a business, HMV are charging the optimal price (volume v profit).
  • Darren
    It is a great shame, dont get me wrong, they are expensive over priced... and I always find it strange when Blu-rays that have been out for while seem mysteriously go up in price... Transformers 2 is £24.99??? but I think it will really show the impact the Internet has on High street and HMV going will start to show a massive shift in the high street retail market, I can imagine a 100 other retailers now sat thinking... christ, whats our new plan, whats our new strategy. I do genuinely believe though that this has nothing to do with the likes of supermarkets selling cheap CD's etc... they do because they have the money. Isn't it true that Asda sold Call of duty for something like £22 on launch, becuase they knew that those who lined up, would spend average £40 on food and beer, I remember the line at Asda in Manchester, all along was pizza and beer, kids and geeks lining up at 6pm, hours before midnight, but baskets full of pizza, booze and crips for a night of hardcore gaming... Online is a presence for us, something we can go to for cheap products, now its becoming an essential part of our lifes....
  • Mark C.
    Yeah, I'd massively miss going into the big Oxford Street one to browse around and maybe find a few interesting looking films or CDs I'd never heard of before, or never considered buying. The trouble with the online model is that it privileges recent and mainstream releases, and makes it much more difficult for something unexpected to catch your eye, as it does when you're wandering round a physical store. I also worry we'll end up in a situation where the only bricks and mortar retailers are supermarkets, leading to situations where they have the power to affect what is released and when, like Walmart does in the US.
  • Shaun
    The main problem with HMV is that everything it can do instore can be done online, with exception to immediate product delivery. I can't say I go for the customer service, the stock display is large yet average looking, and the prices are substantially more than online. I see HMV and all chain stores like it heading the same direction as Zavvi. I will miss them, as they did have their uses on badly organised last minute present hunts, but not for daily deals I'm afraid.
  • Jerec
    The sooner tbe better, they suck, their prices are a joke and they have never been competitive with other retail stores. As with Woolworths: Good Riddance. (Just send my Sharpshooter gun before you do close ok mofo's!)
  • Christy
    They have difinately gone downhill in the last couple of years both instore and online, on price & service to the point that I've given up with them.
  • Kevin
    They have gone downhill massively in the last couple of years, whichever branches you are talking about as I've been round a few around the country. The massive difference in prices is the major thing. As said above why are older films suddenly going up in price, at prices well above the original retail price (which in itself is also way too high). And also when their own online store is often a fair bit cheaper. I know they are seperate companies but maybe this is where they should be? Think of how desperate the shopping/town centres will be to keep the HMV stores so some deals on rent can be made there too. Could easily be said that digital sales are the way forwards anyway.
  • Paul
    HMV are great for wandering in and picking up some bargains in their sales (which are apparently endless). Nothing beats wandering by and picking up a couple of bargains, straight in your hands without having to wait for the post. But, that's about it. For everything else, they're horrendously overpriced. For example, I was in Glasgow a few days ago and decided to pop in to HMV and FOPP to see if I could pick up the Blu Ray of Inferno. FOPP didn't have it, HMV wanted £25 for it. I ordered it from Play instead for £12.99. I would have been willing to pay a little more to have it in my hands there and then, but double? No thanks. I did pick up a couple of cheap DVDs (2 for £5.99), but they lost out on the bigger sale. That's their problem. While sales can and do get people in the door, anything not in their sales is stupidly overpriced. So, people just buy the sale items with no profit margin. They don't even compete well with other retailers (Gamestation are usually cheaper for games, especially used, while FOPP often have cheaper movies and music), though admittedly not every town has the same choice.
  • Matt
    They need to switch to an online outlet and use the remaining shops as a marketing tool (with the same prices as online) quick. Saying that they're not making a good go at being decent online either atm...
  • Alex B.
    The only unique selling point that HMV and the like currently have is providing instant gratification. Most of the time, though, I'm quite prepared to wait a few days for a CD/DVD to show up in the post for 1/3-1/2 the price. And most of the time, high street stores don't have what I'm after in stock and need to order it in anyway. I might as well cut out the middle-man. Retail of commodity items like CDs, DVDs and Books /can/ survive, but it either needs to be price-competitive with online, or offer something special that online can't (or can't do as well, at least). Listening posts, knowledgeable staff who can make good recommendations, artist personal appearances, book readings/signings etc.
  • James C.
    HMV will close in April from what i have heard. It's been coming for the past few years so it's not really a surprize.
  • Paul d.
    Simon Fox will resign soon as he will want to get away from HMV and leave them to disappear. The staff lost faith with Mr fox last year when he took a massive pay rise. Most of the staff know they will have to find a new job in the next few weeks. They never should have bought all those shops and borrowed all that money. Now they are in a hole....
  • henry d.
    One of the comments mentions FOPP being cheaper. HMV owns FOPP so by shopping at FOPP you are shopping at HMV.
  • Frank T.
    My local store closed the other week. No other music store in town so HMV must be on its last legs. I used to go there but less and less music and more tech rubbish that I have no interest in and lots of sweets they sell. Not really a music store now.
  • barry l.
    I've heard from people in the know that Simon Fox will resign when they release figures next month. HMV will close all the retail shops before the end of year and just have online and venues.
  • paul p.
    HMV to close...
  • Poor B.
    [...] HMV. They have all those money troubles to worry about, so they launch an app that could be potentially groundbreaking for their mainstream market and [...]
  • Mike
    I think the future for CDs, DVDs is online. I'm suprised HMV are still going.

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