Deathwatch: HMV announce losses of almost £40m - company now worth just £16m

19 December 2011

retail deathwatch If you had a bet at some point in the past over who would die first out of Kim Jong-Il and HMV, then the Korean leader has just paid out. But it’s a close-run thing. That’s because HMV’s latest financial results are fairly diabolical, with an underlying pre-tax loss of £36.4m in the 26 weeks to October 29, versus a loss of £27.4m in the same period last year.

The beleaguered entertainment retailer says that it will continue to trade for the foreseeable future, but that, “the economic environment and trading circumstances create material uncertainties which may cast significant doubt on the group's ability to continue as a going concern in the future.” One thing’s for sure – those kinds of losses aren’t really sustainable.

HMV recently shifted their focus, concentrating more on the sales of technology, gagdets and accessories, but it’s hard to see how that is going to prompt the kind of major turnaround that is almost certainly required.

Shares in HMV, which have lost 88% of their value over the last year, closed at 3.87p on Friday, leaving the business valued at just £16.4m – although why anyone would want to take a punt, even at that price, is baffling.

TOPICS:   Economy


  • Dick
    What is the foreseeable future? On Saturday, I asked them in-store when their sale starts. The sales assistant said he didn't know. So maybe the foreseeable future is just a couple of days. Spend those £20 HMV / living social vouchers asap.
  • Grumpy
    They've just totally missed the market pass them by. They either needed to undercut other retailers or turn themselves back into a more specialised store with more knowledgable staff. They did neither. Recently they've acknowledged that they're going to struggle beating digital sales of MP3s and online sales of DVDs. So they bought into live music venues, which have proven very profitable. It's obvious that live music can't really ever be replaced by online sales, so this was a very good move. So what are HMV planning to do? That's right... sell up the live music arm so that they can plough the money back into the failing over-priced music and DVD shops. How are they going to differentiate those shops? That's right... by selling more MP3 players and iPads etc. Y'know, like PC World, Comet, Currys and all of those other successful up-and-coming shops. tl;dr: They're all idiots who deserve to fail. In my opinion they should shut up shop entirely and focus soley on the live music arm of the company.
  • me
    Agreed, things are not looking particularly easy for hmv but it certainly doesn't help to have all these press and media articles burying this 90-year-old British company without knowing all the facts, proper financial background and before it actually happens. What about pulling together instead of hitting on a business which yes I agree is fighting for its survival? It is probably these same people who complain about the loss of all these great "British institutions" (Woolworths and others...) and the decline of our economy. What about our fighting spirit???
  • Richard
    @ me It's fighting for survival because no one is buying its products because they are overpriced. Therefore to save it people would have to buy its overpriced products... IMO if that's the case then it deserves to fail. In terms of economics it's a good thing in that businesses that can't compete fail, trying to save it is like trying to stop giant pandas going extinct. There's a reason they're going extinct it's called evolution.
  • Heywood j.
    In the grand scheme of things, £16 million is very little mopney for a hell of a lot of well positioned, high street stores. Imagine you win £110 million on the euromillions, you could turn them all into shops thast make no money, like in bagpuss. I'm sure emily was dealing coke and ecstasy though to pay the rates.
  • klingelton
    Virgin failed, Zavvi failed, other great music institutions failed. the only way to trade in music now is to find a neiche and stay in it, become specialised folk music/music hall, something like that. find new an innovative ways for drumming up sales of expensive gadgetery. As i previously stated. Coffee does very well on the high street, marry that with music and create a place where people could hang out, meet people, listen to music with their friends and enjoy a drink at the same time. bring back the listening booth where 10 teenagers can cram in and listen to their latest chart hit with their friends. Create a new way for people to consume the music you sell. diversification into another product stream that is already faltering is the wrong way to go about it. HMV deserve to fail. The only thing i pity is the people who lose their jobs at the lower end of the employment scale. Let's face it, for some unknown reason, a CEO who has just caused a company to fail will inexplicably be snapped up by some other corporation.
  • Mary P.
    Right again, sigh.
  • rob
    It all goes full circle, the same people crying about HMV killing off independant record shops are now crying about HMV going under. Fuck em I say
  • Zleet
    Integrate the website more with the bricks and mortar shops and introduce a stock checker and click and collect service that lets you collect at the web price. They may lose a few pennies on the DVD I go in for but they would make it back on the cheap DVD's I buy once i'm there. The simple reason they are going under is because online is now the first stop for 90% of people but HMV run that as a secondary concern that has zero interaction with their massively overpriced shops. Why HMV think anyone would go to a place that charges £25 for a bluray when that same disc is £15 online, even at their own fucking website. Also Blockbuster is always complaining that online downloads and rental through the post is killing their business but if they bloody delivered like a pizza place (and online ordering like dominos) people would love DVD's with a return envelope within 30 minutes rather than days through the post or hours if your internet is shit.
  • Mark H.
    They might get a boost in the new year when the Channel Islands VAT dodge is outlawed and CD's, DVD's, games etc suddenly become 20% more expensive to buy online. We'll see...
  • Twattytbanjo
    I cannot seem them being around xmas 2012 For all the hand-wringing mob (it`s another british institution going) read diversify and innovate....this will keep happening to companies who do not, the days are gone where we were mugged off with stupid prices
  • HMVadmin
    Went into HMV in manchester to buy some DVDS games one being skyrim for the child they wanted £44 - bought online for £22 @ amazon - even when you add 20% they are still taking the piss - and they refused to price match a boxed set priced at £75 on Amazon cheaper then HMV by a paltry £3 so F em
  • Marky M.
    Off-topic maybe but I can't wait for Netflix to start up in Spring and get into a price war with Lovefilm/Amazon.
  • Bloke
    They may well have a lot of well-positioned high street shops but the rents will be crippling them.
  • the_lunatic_is_in_my_head
    HMVadmin It's your attitude that is killing these shops, for an extra £3 you have the item in your hand and can take it home straight away. HMV have to pay their staff and store costs but you're annoyed over 3 quid, very sad. When you look at Amazon's top selling DVDs, most are new release, all without VAT, if the VAT loophole is closed effectively, HMV's prices won't be that expensive but sadly the damage is already done. Zleet, it's £15 on the website because there's no VAT and no store to pay for, If you collect instore it requires the staff and VAT to be paid. HMV's stores aren't making an extra tenner, they have an extra tenner to pay in costs. DVD margins online are tiny, a store can't work in the same way.
  • dazza
    As someone who used to work for HMV all i can say is fuck em i'm just glad i got out before they offered me shares in the company. i feel sorry for some of the staff i used to work with but the majority were clowns who didn't have a clue about what they are selling just go in now and ask for some help in a particular genre and all you will get is a blank stare
  • bob
    I have a £10 HMV card that has been languishing in my wallet for about 4 years. Get it swiped through the till every few months to keep the balance on there, but can't find a thing to spend it on. (don't buy physical music any more). Any suggestions, as I was going to buy a game or some headphones but can't find anything that isn't at least £11 cheaper online, which makes the £10 voucher less than pointless....
  • Zleet
    @he_lunatic_is_in_my_head Not if they ran click and collect as a loss leading promotion on the idea that people wandering round instore will likely buy other things that catch their eye, the same way the supermarkets do it. When the VAT loophole is closed the price difference won't be as massive so if they don't do something like this to draw people in then they will die. If they aren't going to offer click and collect then they should do what the games shops and supermarkets do and pick an item every now and again to sell at a stupidly low price to get the crowds in. I had to kill time the other day and wandered into my local HMV (first time in a year) and found the blu ray of Tangled for £9, out of stock everywhere and a pound more expensive online. That was one Christmas present I would never have known existed if I hadn't went into the shop as HMV bricks and mortar aren't on DVD price comparison sites so no one knows about these deals.
  • the_lunatic_is_in_my_head
    The made a £36 million pound loss and the suggestion is to run a massive loss leader campaign against possibly everything they sell? Supermarkets are a different game, the DVD is sold at a loss but the average person will pick up bread, milk, etc. HMV would most likely just get the odd extra sale not covering the loss. Plus a company like Tesco making billions a year can stand a loss like this once in a while, the price of new release in the supermarket, when not on offer, is also much more expensive than online. The issue is a DVD, CD or game requires no after-care service, you put it in and it works, simple, so the average consumer will shop on price, there is no brand loyalty at all. The years of VAT abuse have pushed HMV right down and now customers are loyal to the likes of Amazon, again selling lots of media at a loss to retain customers. There are some ideas HMV could follow to draw people into the store but when you have the mentality such as above where £78 will draw a customer away to a less convenient purchase for the sake of 4% of the price, any schemes or promos are a very big risk. I wouldn't be surprised if sometime in the near future is just another site owned by the TheHut and their stores vanish from our high streets. That leaves 4 main DVD retailers, with one just having been sold to a company in Japan and probably won't stay in Jersey so who knows what will happen with Play, and the lack of choice is not good for the consumer nor the suppliers which again in turn is not good for the consumer.
  • Mike H.
    The time has come HMV. We aere tired of you ripping us off for £14.99 CD's wank stains. Zleet - A whole £1 more expensive online? Fuck me, you got the bargain of the century there. Which lucky person gets a Blu-ray copy of Tangled then? Cheapskate fuck-tit.
  • B
    In most towns & cities HMV is the only Music retailer left, if they go that's it on the high street, my city used to have HMV, a Virgin & three independents, not anymore, HMV is the last one!
  • Spencer
    The thing is, the music 'industry' as a whole is ultimately a flawed business model. I remember the days when it would set you back at least 5 figures to record, promote, ship and distribute a good album... it can be done on a home pc these days. you can write, compose, record, master, produce, advertise, market, promote and sell an album, without leaving your desk... the business of music is dying. It relys on exploitation. It exploited the consumer for many years by charging stupid prices for albums that cost pence to make... and it exploited the naievity of aspiring musicians. up until the last 10 years or so they could get away with as well... because, how else are we going to buy our records and how else are a band going to release an album. The trouble is the internet has given both musicians and customers an alternative. We've suddenly realised... we don't HAVE to spend £15 on a cd. We don't HAVE to buy from 'x' shop... and bands dont HAVE to sign their livelihood away... they dont have to get in £15k worth of debt... long may it continue...
  • Charles D.
    I believe HMV is planning to close a large number of stores in the new year. As other people say it is just a matter of time before they go. Customers should be careful buying from there.
  • Hugh
    HMV is a very badly run company who spent money they didn't have that produced all the debt now. The board should all go and feel ashamed for what their actions have done to the company which has been going over 90 years.
  • sefton22
    only HMV left near me that sells CD's & DVD's (+ 3 supermarkets within a mile of each other). havent bought anything from a HMV store as is always expensive & such a hassle ordering in a certain items (the staff had never heard of theory of a deadman-"computer says no...". one look online, found, bought delivered!!!!
  • Rubisco
    "the staff had never heard of theory of a deadman" Faced with the prospect of impending unemployment, at least they can be thankful for small mercies...
  • Simon W.
    If the CEO is reading this..its very simple to turn around HMV....yes it is. Change the price policy start selling games, cd at the same price as internet. For instance GT5 is now around 10 notes go into HMV its 17.95. Look at Primark they have very very low margin, but it works. HMV will problarly die , unless they hire joke...
  • moderoator
    HMV is a flop, in the past they were successful because customers were not aware if the goods that they were purchasing from hmv, were of reasonable price. But now with more shoppers being aware of this, they now no that hmv took everyone for a fo0l so the customers are getting them back for it ;) and obviously because there's 99.999% other places that sell it cheaper. :)
  • wizoema
    HMV is a tired,monsterously overpriced, badly run company that won't be missed by the vast- vast majority of customers. Good riddence

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