February 8, 2019
HMV rescue marred by widespread store closures
by Tom Clayton
This week HMV, the venerable UK chain record store, was saved from the brink of collapse by a buyout from Canadian entrepreneur and head of Sunrise Records, Doug Putman. The BBC reports that Putman was “delighted to acquire the most iconic music and entertainment business in the UK.” It is good news for the company, which was opened in 1921 by the London Gramophone Company and is named after His Master’s Voice, the Francis Barraud painting of the same name. (The dog is named Nipper, you know.)
The deal means that 100 stores will remain open, a move that also secures the fortunes of several Fopp stores (a subsidiary of HMV), including London’s Covent Garden branch, and will safeguard hundreds of jobs at the company.
But there’s a flip side to these apparent positives: 27 stores are set to close permanently—and indeed, have already been shuttered—across the UK. These include the chain’s flagship Oxford Street store, and large regional stores including those in Manchester, Glasgow, Bristol, Sheffield and Bath. Four Fopp branches are also set to close nationwide.
This isn’t the first time HMV has flirted with financial oblivion. It called in administrators in 2013, and the company’s future looked uncertain for several months until restructuring specialists Hilco acquired the company in a deal reportedly worth £50 million.
That move signalled a palpable shift in the store’s core stock, moving towards music-related merchandise and high-value products like turntables and headphones—an effort to diversify in a market increasingly reliant on digital music. It was a tactic that seems to have been ultimately unsuccessful.
It appears Putman—who, according to The Guardian‘s recent profile, is a reportedly a big fan of vinyl—will instead look to capitalise on the format’s much-vaunted revival in recent years. That could be a smart move, leaning further into a nostalgia market described by the Wall Street Journal in 2017 as a “billion-dollar niche.” Where stores remain, the future could potentially be bright for the company.
However, HMV’s presence on the high streets of many smaller UK towns will be sorely missed. Though the store’s cheaply-priced and uniform stock has not always been popular, especially in towns with competing indies, they were relied upon by huge numbers of people in regional areas without access to those independent equivalents. It is likely that such closures, rather than sending consumers in search of in-store alternatives, will only drive them, regrettably, in the direction of Amazon—a trend we know all too well in the book trade.
HMV will have to come up with something pretty spectacular if it is to reverse its fortunes—especially in a difficult, Brexit-shadowed climate that saw many equivalent stores suffer over the Holidays. Still, Putman may yet prove the doubters wrong, and teach the old dog a few new tricks…
Tom Clayton is publishing executive at Melville House UK.