Retail Deathwatch: HMV announce huge losses

9 December 2010

retaildeathwatchIt’s snow joke but share prices in the HMV Group have melted by 20% after the announcement of some depressing figures earlier today. The veteran entertainment retailer made a pre-tax loss of £41.3m in the six months to 23rd October – and the recent weather means things haven’t improved leading up to Christmas.

By comparison, the group made a 24.9% loss last year, which makes today’s announcement even more alarming. Like-for-like sales (not including new store openings) fell by 16.1% whereas for Waterstones, which is also owned by the HMV Group, made a far more sedate loss of 3.2%.

hmv2HMV have said that the recent vile weather has “significantly affected customer footfall, and consequently makes trading patterns hard to determine at this stage” but when the figures quoted only go up until the end of October, it hardly makes mentioning the snow worthwhile.

Keith Bowman, equity analyst at Hargreaves Lansdown, told the BBC that HMV was "paying the price for failing to embrace the internet much sooner", adding that "These results do little to ease fears that HMV is slowly being consigned to the history books. Furthermore, moves to diversify the product offering smack of desperation, with competition in clothing and electrical products already hugely intense.”

Is Keith right? How relevant are HMV as we hurtle towards 2011? What is that dog's master actually saying to it? TELL US!

TOPICS:   Economy

17 comments

  • Ben
    Even the middle class trust Amazon, who undercut HMV at every turn. I doubt they'll go fully under immediately, but I'd expect mass closures over the next couple of years, followed by a slow, gradual fade to oblivion. So the retail equivalent of my nan's bodily organs, then.
  • Nick T.
    "Failing to embrace the internet much sooner"? He's talking cobblers: I was buying stuff off HMV's web site before Amazon were trading in the UK and iTunes hadn't even launched at all. And as for "moves to diversify the product offering smacks of desperation". Really? What do you suggest? Do nothing?
  • PokeHerPete
    Im sure they still recent DVD releases at something stupid like £15.99.
  • Royal A.
    I agree, their new release DVDs are a rip but they're actually quite reasonable for Blu-Rays e.g. Inception on Blu-Ray: £14.99 @ HMV (in store) £14.99 @ Asda (in store) £14.93 @ Amazon.co.uk £14.99 @ Play.com Personally I wouldn't pay more than £10 for a Blu-Ray (and even that's pushing the boat out) but comparatively speaking HMV's prices aren't that bad. It's their Games that are overpriced as well as the insistence on charging £3 for a loyalty card!?!? WTF?!?!?! The idea of a loyalty card is to keep shoppers coming to them as opposed to anyone else (all while you track their buying habits and then send them targetted adverts and offers) - to charge £3 for that is a joke!!
  • Darryl
    If they were to close majority of stores, and just have no more than 10 around the country where online orders can be picked up from the shop, and have it solely online competing with prices of other online retailers... winner winner.
  • Nobby
    @ Darryl. They would have to post as well as allow collection, otherwise the online site would die. Not everyone will live near one of the 10 shops. Delivery would have to be "free" (inclusive) to compete with other online retailers. And if it was solely online, then you wouldn't be able to go in to the shop and just have a look. So why bother with the shop? If they were solely online, then they might as well just be a large warehouse out of town somewhere the rent is low and the packers will work for minimum wage.
  • PlatPlat
    HMV are too pricey, simple.
  • FFS
    As mentioned by others, HMV simply aren't competitive enough. You get the bargains sometimes on older stuff, but when something is new out, HMV would probably be the last place I'd check out as I already know they'll pretty much be sitting at RRP, online and instore. I've always liked them as a retailer and have always liked shopping there instore (besides the queues), so it would be a shame to see them fall into serious trouble.
  • Slacker
    HMV will indeed die. Whenever I go into one of their stores and see something I want, I invariably put it back in the rack knowing that I'll be able to buy the exact same thing cheaper online when I get home.
  • Richx45
    That'll teach them for selling products they don't even have in stock, AKA, mine & others who have their copies of battlefield badf company, ulitmate edtion CANCELLED!!!!
  • Zerohour2
    HMV instore prices can be almost double of there own online prices, especially for back catalog non chart items. I find they compete well online and have purchased items from them that I didn't really intend to buy based solely on price....its been at least a year since I purchased anything in store, despite popping in and having a browse regularly.
  • matt
    unbelievable, woolworths and zavvi gone they are pretty much all thats left on the high st, excluding supermarkets, they cant even make a fist of that, woolies used to do £400 million a year on the exact same stuff they sell
  • Brad
    "significantly affected customer footfall" Is that business wankery talk for walking? And yes in store the prices are at time's nothing short of comedy.
  • Paul C.
    @PlatPlat Spot on. the issue has always been price for HMV - they rested on their laurels when other retailers in their sector started to die out (Zavvi, Wollies, Our Price, Virgin Megastores) and kept their prices artificially high. Instore, they are just as bad - cutting back traditional music sections drastically - in my local, the CDs are confined to a couple of bookshelved that wouldn't look out of place in the British Heart Foundation shop. The emphasis on DVDs, books, fan memorabillia and technology is a poor attempt at diversifying, There seems to be a complete lack of personal service in stores - whereas before I could go in to shops and order Right Said Fred's latest release with a member of staff on that fancy ordering computer that was away from the tills. In summary, there is nothing that I cannot get from a substantially cheaper online retailer that I can get from HMV instore or otherwise. Their poor pricing and promotion really fucks up their marketing mix.
  • Andrew
    I'm sure Gamerbase in their bigger stores will save them :)
  • Zleet
    The difference in website and store prices is annoying when you want to know the cost of an item you wish to buy in person and they missed a trick not having stock availability (in store) like waterstones.
  • JO
    Maybe they should work harder to get those annoying charity salesmen with clipboards away from their shops. I ALWAYS cross over to the other side of the road when I walk past any of my local HMV stores to avoid them. They just badger you non-stop as theyre on comission I ususally just tell them I'm 15, that gets rid of them the quickest.

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