Deathwatch: HMV group to close 60 stores as sales slump

5 January 2011

retaildeathwatchFears are growing that the axe of doom could be hanging over HMV, that high street veteran of the sale of records, tapes, compact discs and lately, other assorted tat.

They’ve announced plans to permanently pull the shutters down on 40 of their stores over the coming year as they try to tackle plummeting sales, thin and weedy profits and bank loan difficulties.

hmvpa_468x374HMV’s sales at Christmas were down by 10% and the company have issued a profit warning, leading to a 24% drop in the share price. Blame for the sales slump has been attributed to the crappy weather and ‘challenging trading conditions’. Worryingly, the share price has seen a cumulative fall of 78% over the last 13 months.

Waterstone's, also part of the HMV group, has confirmed that 20 of its book stores will all close over the next twelve months. In total the HMV group has 285 HMV shops and 312 Waterstone's stores.

Other cost-cutting measures are planned within the company that they hope will save another £10m per year. But will it be enough? Will HMV go the same way as Our Price and will Nipper the dog end up with a needle in his neck (and we’re not talking about the one from the gramophone)?

TOPICS:   High Street News

33 comments

  • Delenn
    It will be a very sad day if HMV is no longer with us. I know it charges too much. I know some staff know little about music. I know how "convenient" online is. I know how "convenient" digital downloads are. I know all that. I am on an age (37) to remember when a days shopping meant HMV, Virgin, Our Price, Andys Records, WHSmiths, John Menzies, Woolworths and some local independents. A days shopping meant flicking over records and DVDs and discovering a gem you had no idea of. The excitement of taking it home and listening to your prize. The 70/30 chance it was rubbish, but that did not matter. The online shopping experience does NOTHING for me. Nothing at all. I mourn the loss of this shopping experience to the point that I rarely go into shopping centres and town centres at all. I do still buy physical product, because I own it. Within an hour of being home, it is digitised and available across all devices I need, in a high quality (better than most bought mp3s) and rights free basis. That is digital working for me, not digital working for the music industry. HMV simply has to survive, otherwise I will not need to visit a high street again.
  • Delenn
    Oh for an edit facility. In the above, "records and DVDs" should say "records and videos, then CDs and DVDs" Also, it looks like some of the 60 stores will be Waterstones. Finally, it should be said there are some peculiar property choices. Look at central Birmingham. 3 HMVs (including a large one) and 2 Waterstones (including a large one) within a mile of each other. That is some expensive property they have there. Even somewhere like Colchester in Essex has 2 Waterstones, less than 100 yeards from each other. Seems to me they need to dispose of some of these excess properties.
  • Cheeky M.
    I'm of a similar age, but the opposite opinion. Shopping (for music) used to be about going to the high street, and thumbing through records. I don't think you can do that these days, without the store pumping shit music so loud that the experience is not enjoyable. Stores have always pumped music but these days it just seems to be shit. About three years ago I asked in HMV if I could have a quick listen to a CD before buying it (a fairly common practice in the Netherlands where I used to live), and was told to either buy it then listen to it or listen to clips from it online first then come back and buy it. I listened online, then bought the CD online. I listen mainly to digitised music, but as you, I still buy CDs rather than downloads. I just buy them for a better price online, rather than going into a high street store that has no respect for its customers. HMV can die (or just disappear with only an online presence), I will not mourn them. Independents, maybe. But not HMV.
  • xman
    Shopping in HMV is a horrible experience. You have to guess what things are classified as in order to look for them, after wading past all the crap that they want to unload on you that is piled up round the door. Waterstones is not a lot better these days to be honest.
  • Chris H.
    HMV have cancelled two new release CDs I ordered through them saying they were now out of print. I can only guess it was because the CDs were on small(ish) labels and the mark up wasn't enough for them to want to supply them. Hard to feel sorry for a business that has that kind of attitude to its customers.
  • Tim
    Last time I went into HMV I found the CD section has dwindled into a large amount of sales items of general rubbish, and the rest a small selection of back catalogues. It used to be the case you could get most albums by most mainstream artists in HMV. Now it's only possible online. My local WH Smiths no longer does CDs and DVDs (replaced by the bloody Post Office now located in there!). Sad thing is the loss of CDs on the high street means the probably death of the CD which means we are left with mostly compressed to hell MP3s to download and no sleeve notes. CDs weren't perfect quality but (other than the rare few that do Flacs), buying a CD and ripping it is the best quality I can get, and the cheapest option. HMV has been good value for cheap DVDs in the sales though, and it's good for browsing. Can't do that so easily with Amazon. However their Blu Ray prices are shocking!
  • Deathwatch B.
    [...] dear. HMV may be on a sticky wicket, but at least they’re still managing to soldier on. It seems the same can’t be said for [...]
  • LD
    Waterstones? Like HMV, not competitive at all - a recent title I was after £16.00 quid in the local Waterstones local shop; £11.05 DELIVERED from the Book Depository. No brainer.
  • GB
    No big loss really, HMV instore is overpriced and never a pleasure to visit. Preordered GT5 there for £35 only to find they jacked the price up to £45 when i went to collect it. Didn't buy it, so went online and got it for £26 delivered.
  • RB
    I am going to disagree with some of the suggestions here which in fairness I think are very stereotypical. Yes everyone has a bad experience at some point or other but to paint everyone with the same brush is slightly harsh. Firstly if you're not sure what classification or genre something is under why not ask a member of staff. That's what they're there for, secondly in my local the genres are pretty straightforward, rock/pop, metal, easy listening, world, country etc. The other problem is that they can't afford to have massive back catalogues similar to Amazon because they don't have the space. Amazon and Play.com can afford to buy a massive warehouse in the middle of nowhere which will cost very little whereas HMV have to pay for relatively small premium location properties which have high rents. That is simply a trade off that is necessary for HMV to stay in business. If Amazon had a high street presence you can bet your money that they wouldn't have a wide back catalogue either. Don't get me wrong some of the prices of back catalogue stuff can be pretty expensive but again you have to weigh up the convenience factor. Will the supermarkets ever offer a wide back catalogue in stores, no they only sell the very latest releases and although I hear complaints about a lack of knowledge on the part of some HMV staff, I would expect to at least receive better advice and knowledge than that provided by the supermarkets. The other problem is that if people don't buy the back catalogue stock then they won't invest in more, so really it's a catch twenty two, you can't expect them to provide great stock if no-one purchases it. I am aware of the faults of the company but I think it would be devastating if we were to lose HMV from the high street. I think for 2011 the correct phrase is "use it or lose it"
  • Alex
    HMV has become a soulless store with shit music playing, staff with no clue, bad layout, and unsure of its own target market. I know it has typical storefront overheads, but by the time you factor in petrol, parking, and just the general hassle you can find yourself having a total cost of 1 cd being double what you'd pay online. Sadly for them, HMV can't get their online side of the business right either, I've given up with them due to constant misprices [cancelled, would I like to pay the higher price? no thanks. and thanks for making me wait 3 days to tell me that] and shoddy service. My local HMV is fast becoming like SportsDirect, crappy cheap bought in bulk shift it quick tat that nobody wants clogging up the entrance. They need to sort themselves out or 2 years from now they'll be gone.
  • br04dyz
    TBH, I'd miss going into HMV while my wifes in Wallis....its always opposite-ish and a nice distraction. Also, I like to play the "Can I Find This Cheaper" game.....you pick up a DVD from the sale section, then go round the whole store looking for it in another section to see how much you could save. Spent most of my college-days playing that game :-)
  • Andy247
    HMV have 3 stores in central Glasgow, within 10 minutes walk of one another, as well as a presence in all of the large out of town shopping centres, they also own FOPP now so to be honest this doesn't surprise me. They've saturated the market.
  • John
    Hopefully when the dust settles and HMV are wound down (let’s face it, losing three quarters of your share value in just over a year usually points to impending bankruptcy) the FOPP stores they bought over can be spun out again as Independents. FOPP really hasn't been the same since HMV started flooding them with cheap DVD tat and in some instances even trying to sell console games. No-one is really going to shed many tears when it goes, apart from the poor buggers that work there of course. It's been synonymous with middle-of-the-road hear-today-bargain-bin-tomorrow crap ever since I've been buying music. I still enjoy buying albums in person but it's become a rarer occurrence and as such I usually choose to do my CD shopping in an indie store. I've generally found HMV online to be a pretty good service, with decent prices for certain things. However their game prices are a complete joke, why they bother when pretty much everyone else is undercutting them is a mystery (and possibly points to why they have such crappy sales figures).
  • kv
    they lost alot of business from me because of charging £2.50 for postage outside UK, as opposed to the 99p charged by the Zavvi group, or free delivery with amazon
  • shinkyshonky
    Went to one on monday, the pile of crap by the front entrance to get people in was unbelievable, however asked for 2 cd`s , checked in stock..., but 9.99 each, online 2.99 , no brainer..the problem is they have long gone the supermarket way...pile tat high and sell it cheap, get punters in, but if you go for backcat you pay a premium, maybe need to cut down and become specialised , or are we all time poor and have sleep walked into big brother supermarket sweep I fear it`s the latter....but hey 2011 is going to be the revolution year so either evolve or disolve
  • Kip
    They need to trim down and get pricing at a sensible level to survive. There are two Waterstone Stores in Chelmsford, just metres from each other, I expect to see one of those go, it's just surplus to requirements. I think when HMV bought out Ottakar's, they converted all the stores to Waterstones, regardless of whether there was an existing Waterstones in town or not. Which obviously isn't really that sensible.
  • Zleet
    Offer click and collect on dvd's and box sets via the website like currys do and you will increase the number of people willing to go to the actual shop and in the process the number of people buying extra DVD's while they are there. At least on the waterstones website it gives a general idea of instore stock and feels like the two entities are connected which the HMV website does not.
  • The B.
    I have nothing against HMV, I bought about 12 CD's (another thirty something who still buys them) for around £70 before Christmas but from their on-line store but I wouldn't step foot in their physical stores, it's horrible in there.
  • Yue
    Having worked for this company I can only say, so glad I quit. Run by a bunch of muppets who treat their staff like crap. Shame for my friends that I left behind, I suspect quite a few of them will be affected. I would have thought the online store would have floated most of the failures the physical store management had though. As Kip says they do have a number of duplicate stores in towns, mainly from taking over stores they bought up (Ottakars for example). And they killed off all of the independents too. Feck 'em.
  • Dick W.
    @alex ... HMV has become a soulless store with shit music playing, staff with no clue, bad layout, and unsure of its own target market. That sounds like woolworths, and zavvi, and many other high street shops past and present. They've lost their way, and will die. And then make room for another pound shop or coffee shop.
  • Tim
    @RB - valid point on not being able to stock as much as Amazon, but the point I was making was that HMV used to stock far more and you had a better chance of finding what you wanted, especially big name mainstream artists and recent titles (that aren't in the charts). Now the majority of the place is taken up with the sales tat which is rows upon rows of the same CDs & DVDs that no one wants but thinks are a good deal because of the cheap prices, and all that's left is small space for the chart stuff, a limited and very expensive back catalogue selection and some games.
  • WARWICK H.
    My local HMV is fast becoming like SportsDirect, crappy cheap bought in bulk shift it quick tat that nobody wants clogging up the entrance. They need to sort themselves out or 2 years from now they’ll be gone I like it - I lke it - hopefully SportsDirect will disappear and take that fat c**t Ashley with them.
  • mark
    while walking around the HMV "sale" most of the games on offer were at least £5 cheaper in GAME, which was next door, and even they are robbing bastards. Cant say im suprised about HMV really
  • Matt
    When they have the same prices in store as they do online (that is HMV online!) I'll buy more instore. If they're not prepared to do this expect to close.
  • MarkG
    HMV going to the wall today, Game/Gamestation tomorrow. Consumers are becoming net savvy, and items that can be posted out cheaply like CDs DVDs and Games are prime candidates. Good riddance to all of them, they have failed to adapt and were too focused on greed and profit.
  • Joff
    I've not bought physical media for years, much preferring the ease of iTunes and more recently the Amazon MP3 store. I used to buy a fair number of CDs, but then I stopped going into the city centre for shopping so the downloadable content age came at the right time for me. In my early 30s if anyone cares. I have no problems with HMV or Virgin (don't think I ever went into a Zavvi) but their high street presence isn't something I have a need for. I rarely go to the cinema (most likely because the Peterborough Showcase feels like it hasn't been refurbished since the mid-80s when it was built) or buy films on DVD. Instead any films I watch are on TV or via an on-demand service. I feel the same will be said for high street computer games retailers once downloading software (legally) becomes the norm. I've done this already with Xbox Live and it works well enough. It's a shame as I have fond memories of wasting my days in the local computer shop, but that's progress.
  • Fiyero
    Hopefully most of the closures will be logical ones. Most cities don't need 2 or 3 of the same store. Southampton and Winchester both have 2 Waterstones each.
  • Seedy
    Is this The Vinyl Countdown?
  • Kevin
    The number they are closing is rather small really considering. And as has been mentioned there are many big town where there are far too many branches. If they are so worried about sales they should concentrate on being online and dedicate the time and money other companies like Play and Amazon have done to be a good retailer in that way. When you can make a comparison between HMV's online store and their high street store costing £9+ more for a boxset you know things are wrong. Not saying it would be great as we do need stores on our high street, even if they are selling just the basics and 'sale' items. but if they get that worried they need to see where their business is best served.
  • Nipper
    It goes without saying the Management of this company have been sitting on their laurels whilst the likes of Amazon, play, et al have strengthened. Anyone buying online will go to these sites not to HMV or 8digital (is that what their called?). Did they approach these companies to sell via their site on a comission basis? if not why not! Every opportunity the Management have had they have squandered. They remind me of the school excuser... please sir isnt wasnt me it was the weather. Their revenues are now coming from the sale of leases rather than books and DVD's. GREAT! Lets hope the sale of these allows them to lower their prices and become competitive. Either that or play tesco at their own game and branch out into groceries and start selling food in their retail outlets. Have they done anything to enter the electronic book market?
  • gingermist
    People seem to think a boxset should be as cheap as one dvd, which is a reflection of our digital society. Think of all the people who worked on it who need to be paid for their job, their livelyhood. Obviously you dont care about that, why would you, but you cant have it all. I like hmv and buying films, I think it has good prices for DVDs but some older ones are a bit expensive, but I think we are all being a bit tight. And I hate amazon as you say its free delivery and say that as a plus, but its a 5 to 7 day wait, so that is so tight with money youre willing to wait ages, yet youre not willing to pay what somethings really worth. Lots of amatuer business people also replying ni the comments, I dont imagine any of you run a massive corporation so I dont know why you feel your opinion on it is worth anything about how to run the business? Just because you work behind a till doesnt mean you know anything about business management does it! It isnt their fault people are undervaluing what something is worth, its not their fault you download illegal music and films either is it. And 90% of people who posted will have. Everyone is blaming management or pricing. Its our fault all the stores have closed, if hmv closes we will have NO stores to buy dvds from apart from supermarkets. That is disgraceful and its completely our fault because of illegal downloading and amazon. People are adding petrol and parking prices into the equation too? How tight is that. How about the cost of your worrying and stressing trying to get the best deal? No high street stores selling anything old is a joke. A joke on us.
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