Sunday, 20 January 2013

HMV is dead - part 1

This week has seen quite a lot of turmoil in the high street. Following a number of traditional retailers who have unfortunately bowed out of Britain's shopping centers  venerable music and media giant HMV group have thrown in the towel and filed for bankruptcy. And of course I have an opinion on it.

From the number of posts in the blogosphere and news articles in news outlets, everyone has something to say about how terrible it is that the only mainstream music store has gone, or how inevitable it is for a dinosaur bricks-and-mortar retail organisation like HMV to eventually go the way of the dodo, presumably to the gain of iTunes and Amazon (Play sadly no longer with us). There are plenty who are sympathetic to the employees on the ground and in general it seems that they are overly surprised to hear that HMV have suddenly announced that they have been in dire straits.

I find this rather perplexing as a music fan. HMV always struck me as too expensive or too middle of the road with regards to their stock choices and there are plenty of people who will moan about their high prices. I think I've only ever recently gone in to an HMV when I've been looking for presents to buy others and it is not as if HMV have been silent on how well they have been faring, given how many messages there have been about HMV selling off their live music and book chain assets to raise operating cash.

I suppose I can't really mention a failing business that has high prices, an outdated business model and long retail presence without thinking about Blockbuster, another media chain that filed for administration this week. Of course, for them the writing was on the wall ever since the American arm of the business went down the drain in 2010 (provoking the question of why was it able to stay alive for longer in the UK?), but both HMV and Blockbusters seem to provoke the same reaction of rose-tinted nostalgia in British shoppers. I wonder if this is more of a psychological thing, a sort of retail Stockholm Syndrome where the British public is used to being fleeced in the high street and feel that they won't be able to buy CDs and DVDs easily ever again. Almost as if they have never realised how easier, cheaper and more convenient it is to look at the online alternatives.

As for the future of HMV Group, as I understand it Deloitte are going to be taking over and running it as business as usual as possible until a potential buyer for the company and/or its assets is found. A week after the announcement and they still seem confident that there will be a buyer found;  as a brand, the name still has a lot of value - the logo of Nipper /His Master's Voice in particular seems to be one of their most valuable assets - and I wonder if this will be enough for a future buyer to put it to good use. Either way, some serious work would have to be put in to make it anywhere near profitable again. There have already been casualties, such as their Irish operations and stores, which have already been closed this week and there have also been some bizarre announcements, such as companies like Game coming forward to talk about purchasing the empire of retail units to try and reinvigorate their chain (tough job, good luck with that one whilst digital distribution gets bigger every year). The news that they won't accept vouchers and HMV cards is hardly surprising - this is the first thing that goes when a company goes under - but still provides something for the public and even MPs to moan "theft!" over. I still find it very hard to believe that the last firm on the British high street that had a monopoly on media sales actually filed for administration, but then again if they weren't able to actually capitalise on that monopoly and they still went down, then I feel that i am justified in my lack of sympathy towards HMV's management for the fate of the company.

Perhaps the worst thing that has happened in this whole mess is the demise of one of my favourite chains of music stores - Fopp records, who were bought by HMV a few years ago after the chain went bust. Fopp were famous for buying limited batches of cheap records and DVDs from distributors and selling them quickly and cheaply for £3, £5 and £7 each. As a result, you could really bulk up your collection of old and obscure titles quickly for a much lower cost than the alternative of buying from a larger chain (a paradox, given the buying power of a larger company). So as a student you can imagine how popular the shop was for me and my friends. After its acquisition by HMV, Foppp reopened as normal and retained its good value but unfortunately seemed to pick up some bad habits along the way. I'm talking about the increase in music accessories and having a much slower stock turnaround and slightly higher prices than before. Now that the parent company has gone bust, I expect it will drag down this little gem into the gutter along with it.

And I suppose that nothing lasts for ever after all.