HMV remains the UK's leading traditional retailer of music and home entertainment, though it is a much smaller business than it was a decade ago, now with 125 stores in the UK (down from over 200). By 3Q 2018, HMV had reclaimed a lead over Amazon UK as the UK's biggest retailer of physical (as opposed to digital) music, with 28% share (to Amazon's 21%). The latter still leads in total entertainment with 23% to HMV's 18.5%. That recovery seemed to show an impressive turnaround from virtual collapse five years earlier. During the 1990s and 2000s the group diversified widely, acquiring the UK's biggest bookseller Waterstones and also moving into live entertainment with the bolt-on of several leading music venues and summer festivals as well as their associated ticketing services. However the group was caught off-guard by a sudden slump in offline entertainment sales which started in 2010, prompting the sell-off of many of these additional divisions to protect the core business. Poor trading over Christmas 2012 was the last straw, and HMV was forced to call in administrators in early 2013. With the support of its suppliers, it was rescued by private equity firm Hilco Capital, and more than a third of outlets were closed. Around 100 stores in Canada continued to trade separately under Hilco's ownership but finally went into administration in 2017 and were acquired by local chain Sunrise Records. HMV UK has clawed its way back to profitability since then, though revenues are still falling: to £277m for 2017, with operating profit of £7m. Yet another dramatic slump in sales over Christmas 2018 resulted in a second filing for administration at the end of that year. Paul McGowan of Hilco is executive chairman. HMV chief executive Ian Topping left the company in 2018; Neil Taylor is managing director. The HMV brand has been a pioneer in popular music in the UK since 1899, originally under its full name of His Master's Voice as the badge for sheet music and gramophone records produced by a forerunner of what was later EMI. The first HMV retail outlet opened in London in 1921, and but didn't really establish a national presence until the 1970s. EMI demerged the business as an independent company in 2002. Subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
Capsule checked 16th November 2018
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Recent stories from Adbrands Weekly Update:
Adbrands Daily Update 5th Feb 2019: HMV has been rescued by retail entrepreneur Doug Putnam, owner of Canadian chain Sunrise Records. He had previously acquired most of HMV's stores in Canada when they went into administration in 2017. "We are delighted to acquire the most iconic music and entertainment business in the UK and add nearly 1,500 employees to our growing team," he said. "By catering to music and entertainment lovers, we are incredibly excited about the opportunity to engage customers with a diverse range of physical format content, and replicate our success in Canada." Putnam will take over around 100 outlets in the UK, which will continue to trade under the HMV name. No terms were disclosed. Another 27 will be closed because of their onerous lease arrangements.
Adbrands Daily Update 28th Dec 2018: And it had all seemed to be going so well... Entertainment retailer HMV collapsed into administration for the second time in six years after a crash in sales over the Christmas holidays. A similar slump caused its previous crisis at the end of 2012. "During the key Christmas trading period, the market for DVDs fell by over 30% compared to the previous year," said executive chairman Paul McGowan, "and while HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable. HMV has clearly not been insulated from the general malaise of the UK high street and has suffered the same challenges with business rates and other government-centric policies, which have led to increased fixed costs in the business. Business rates alone represent an annual cost to HMV in excess of £15m. Even an exceptionally well run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months, on top of such a dramatic change in consumer behaviour in the entertainment market."
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