‘His Master’s Voice’ has been hoarse for a while, but may not be silenced yet, as HMV’s administrators, Deloitte, say that 50 potential buyers have emerged for the stricken retailer. Restructuring specialists Hilco look the most likely to salvage something from the 223 stores, giving a glimmer of hope to its 4000 staff. Welcome news too for those previously told their Christmas HMV vouchers were now purely of historical value. Deloitte have confirmed they are legal tender again, sending torrents of teenagers to rummage through the recycling.
After the news broke last week of HMV’s impending demise, Andy Heath, the chair of UK Music said that “going into administration gives HMV an opportunity for a substantial and decent rebirth.” Whilst it sounded as glass-half-full as viewing imminent redundancy as an exciting chance to reconnect with daytime telly and poor personal hygiene, it seems HMV may yet arise phoenix-like from the advancing ashtray.
The company had been effectively drowning in Amazon’s wake for ages, and the opportunity for genuine rebirth is long overdue. Like the camera retailer Jessops, whose 187 stores have shut up shop with the loss of over 1,300 jobs, HMV have failed to find a new niche in the face of increased competition. Aside from the inexorable move towards on-line offerings, supermarkets popped the price bubble with bargain chart CDs through the checkouts, forcing record stores to keep up or be boarded up.
Like many, I admit to a modest wave of nostalgia when I remember gleefully trawling through the record racks, my HMV voucher in hand. But then I recall grabbing charts CDs from Tesco for under a tenner, which would have got you about three verses and a chorus on the high street. Bingo, the wave was broken.
HMV’s like-for-like sales in 2011 were down 11.6% on the previous year, but they still turned in a profit of £17.6 million. By 2012, as the company attempted its last rigorous restructure, shifting focus to live music, ticketing and digital, profits for the “HMV Live” wing of the business did increase, but it was a tourniquet against a tidal wave. 2011/12 produced an overall loss before tax of £16.2 million.