Tag: HMV

Hilco to cut another 400 jobs at HMV

hmv-administrationHilco, the new owner of HMV, is planning to cut 400 jobs at the troubled entertainment retailer. The Times reports that Hilco is looking to save as much as £7.8 million from its annual payroll and the latest round of cuts is just one in a series of cost cutting measures.

An internal memo to HMV staff listed the positions earmarked for layoffs. Although Hilco did not say exactly how many jobs will be cut, the memo states that three positions in most of HMV’s remaining 141 stores will go, which amounts to about 400.

Security guards will be among those dropped in nearly all stores, except those in “high risk” areas. Cashiers in more than 100 stores will also lose their jobs, along with supervisors. It seems that part-time staff will eventually account for about 50 percent of HMV’s total workforce.

Hilco scooped up HMV earlier this year and it apparently plans to focus its revival efforts on 141 stores, employing around 2,500 souls. However, the future of dozens of stores across the country has already been sealed.

HMV to be aquired by Hilco

hmv-administrationTroubled HMV has grabbed a lifeline from Hilco buying it out.

The store, which went into administration earlier this year, putting thousands of jobs at risk, has been rescued by specialist restructuring firm Hilco in what is believed to be a £50 million deal.

Hilco now has 132 HMV stores, and nine branches of the Fopp chain. It is expected up to 2,500 jobs could be saved.

The chain is expected to be run by a combination of HMV and newly-appointed Hilco executives, while suppliers are also rumoured to have gone running back to the company offering new terms and given a positive nod to the deal.

HMV could be in safer hands with Hilco already having experience with the brand in Canada, which it bought two years ago.

The purchase rumours emerged a after Jessops was saved by Peter Jones.

High street slump has no effect on video game disties

pac-manHMV and Blockbuster are gone, along with countless independent shops, but their demise doesn’t appear to be hurting video game distributors. In fact, the leading UK distributors told MCV that the closures did not have much of an impact at all.

Mastertronic said the bankruptcies are a non-issue, as most stock is now on a consignment basis. “However, where we have expensive console stock in the retail channel and no practical means of retrieving it quickly, it still poses a problem. The ongoing transition to a digital business has minimised the effects of these closures,” said Mastertronic operations director Dermot Stapleton.

Vogue Distribution sales manager Tom Popple said the poor performance of the retail sector has made had a knock-on effect on game sales, but Vogue is weathering the storm by expanding into new markets. Clock Entertainment exec Jake Wright said it is sad to see big names disappear from the UK high street, but he pointed out that the closures did not have much effect on his outfit.

A number of execs from Bright Red Distribution, Gem and Link Distribution concur. While none of them welcome the demise of high street chains, they don’t appear too concerned, either. Besides, the long-term trend in the gaming industry is online distribution, with constant updates and plenty of downloadable content to keep gamers hooked.

The demise of brick and mortar shops is already boosting online sales, although sales of PC games are not doing very well. High street’s woes did not take a financial toll on games distributors, but they did hurt company confidence and there are not that many positive signs to report. PC sales are down, console lovers are waiting for next-gen gear and casual gaming on mobile devices is bigger than ever.

20 shops close a day and it’s getting worse

highstreetRetail chains in Britain closed an average of 20 stores a day over the past year. According to a report by the Local Data Company and PwC, the number of shop closures in 2012 soared tenfold on the year before.

It makes for some depressing reading to say the least. The survey found that 1,779 stores were closed in 2012, compared to just 174 in 2011.

The downturn seems to be affecting every sector, from travel agents and sports goods shops, to banks, computer game shops and jewellers. However, some businesses seem to have bucked the trend, including charity shops, pawnbrokers, pound shops, betting shops and payday loan companies, basically all the services people are likely to use when they are broke like Greece and out of work like Spanish youths.

It gets worse. The number of closures is predicted to rise and the rate of closures in December, January and February is up and could hit 28 a day. Many companies are falling into administration, including former heavyweights like HMV. Blockbuster, Jessops and Comet are down and out as well.

Mike Jervis, insolvency partner and retail specialist at PwC believes the downward trend is getting even worse in 2013.

“2012 saw more retail chains go into insolvency than ever before. The failed chains generally shared two problems- too many stores and too little multi-channel activity,” he said. “A number of them had failed to deal with their underlying issues by hiding behind light touch restructuring processes, especially Company Voluntary Arrangements.”

Christine Cross, chief retail adviser to PwC, said the figures are more disappointing than many had hoped, but she pointed out that several major chains were forced to resort to closures and this was anticipated for a long time.

“What is surprising is the speed at which stores have been picked up by value and grocery retailers in particular. Good businesses with good operating models and good people don’t fail,” she said.

Although closures are up across the board, some regions have taken a bigger hit than others. The South East leads the way with 376 closures, 265 shops closed their doors in West Midlands and the North West saw 215 closures. The North East, Scotland, Yorkshire and the Humber stayed in double digits.

HMV to shut 37 more stores

hmv-administrationMusic retailer HMV’s administrators, Deloitte, have announced that a further 37 stores will be shut down since it went to administration in January.

Administrator Nick Edwards told the BBC that shutting the 37 stores has been taken to “enhance the prospects of the restructured business continuing as a going concern”. Overall HMV plans to shut 103 of its 219 stores. The current round of closures sees HMV pulling out of Heathrow – sad news for weary airport-shufflers waiting for a flight.

Despite the trouble it is in, HMV managed to sign agreements with suppliers to guarantee new stock will appear in stores.

HMV was the latest casualty on the UK’s troubled high street. It going bust was not an enormous surprise in the wake of increased online competition which do not have to cover costs such as high rents and are largely able to undercut traditional retailers on price. Coupled with an increasing digital ecosystem for consumer content, HMV has been in trouble for years.

The following stores will close: Ashford, Basildon, Bolton, Cheltenham, East Kilbride, Enfield, Folkestone, Glasgow Argyle, Gloucester, Grimsby, Hatfield Galleria, Heathrow Terminal 5 – Departure Level, Heathrow Terminal 1, Heathrow Terminal 3, Heathrow Terminal 4, Hemel Hempstead, High Wycombe, Isle of Wight, Lancaster, Leadenhall, Mansfield, Middlesbrough, Newbury, Newcastle Silverlink, Newport, Nuneaton, Redditch, Salisbury, Scarborough, Southport, Stafford, Staines, Stockport, Swindon, Taunton, Torquay and Woking.

A recent report from Local Data Company revealed the extent shut shops are making themselves known on the high street, with empty stores accounting for nearly 15 percent of retail space across the country this December.

Empty stores make themselves known on the highstreet

highstreetEmpty shops still continue to plague the high street and recent administrations could mean an increase in vacant stores, a report has found.

According to the Local Data Company (LDC) the percentage of empty shops in the country’s 650 most popular high streets nationally hit 14.2 percent in December. That is roughly 35,500 vacant properties.

It was a sorrier story in shopping centres with the company claiming the empty shop  figure rose to 15.6 percent.

However, Clive Longbottom, a retail analyst at Quocirca warned that the figure could be much higher than the report said.

“A lot of the occupancy levels over the December period will have been temporary, with Xmas card and trash gift stores taking a one-month tenancy to shift stuff as quickly as they can, ” he told ChannelEye. “You also have new ideas being tried – is the “play a piano” store, where a piano has been put into an empty shop and anyone can go in and play it, an occupied store, or is it an unoccupied store that just happens to be used for something else?”

“Is the move away from the shopping malls to the high street one based on rates on the high street being lower, landlords being hungrier for cash and lowering rents, an artifact of shorter rental periods, or a sign that councils have more control over the high street and trying to do the Mary Portas stuff over a short period of time?”

LDC shared similar concerns claiming that as a result of top chains, including Blockbuster, HMV and Republic, going to high street heaven, this figure could rise to around one in six – or 17 percent – of stores being empty later this year.

Longbottom added: “The only way that we will see a true picture is to take a longer term view. The general view of the retail market at the moment is that we can expect to see a lot more failures over the coming months.

“There is not the capacity to replace all the Comets, Jessops, JJBs, HMVs, Blockbusters and so on that are disappearing,” Longbottom said. “A few will go to others as some of the Blockbusters stores have been taken by Morrisons, but overall, we can expect the longer term view to be more empty premises, more boarded up shops, a less appealing look to the retail centres of the UK.”

LDC said the vacancies had also been brought about by the growth of retail parks and the growth of online shopping. A lack of consumer spending was also blamed for the demise.

However, it seems the loyalties of the public are more on the side of the small shop – with the report suggesting Britain favours independent retailers rather than chains.

HMV to shut 66 retail shops across Britain

hmv-administrationHMV’s administrators announced Thursday that 66 retail stores across Britain will close their doors over the next two months.

HMV, which entered administration in January, currently operates 220 stores in the UK. Deloitte said the affected stores employ 930 staff, but no fixed date has been set for their closure yet.

Staff quickly took to Twitter, talking about redundancies made across HMV offices and distribution centres.

Deloitte, HMV’s administrator, is in talks with restructuring specialist Hilco about a possible takeover of HMV. Hilco is said to be in talks with suppliers and HMV’s landlords, as part of an effort to save about half of the shops in the UK, Express reports.

“This step has been taken in order to enhance the prospects of securing the business’ future as a going concern,” Nick Edwards, joint administrator at Deloitte, said. “We continue to receive strong support from staff and are extremely grateful to them for their commitment during an understandably difficult period.”

HMV became a hugely profitable enterprise following the introduction of CDs and cheap video tech in the eighties. It quickly expanded around the world, opening shops in North America and on the continent. Its retail operation peaked in the naughties, with 325 shops up and running. However, HMV failed to recognise the threat posed by online distribution to its traditional retail approach and by the late 2000s it was in more trouble than it could handle.

HMV is not the first retail outfit to face collapse due to online competition. Camera chain Jessops and DVD rental business Blockbuster were forced to close last month.

The HMV stores set to close over the next two months are:

England: Ashton-under-Lyne, Barnsley, Bayswater, Bexleyheath, Birkenhead, Birmingham Fort, Blackburn, Boston, Bournemouth Castlepoint, Bracknell, Burton-upon-Trent, Camberley, Chesterfield, Croydon Centrale, Durham, Fulham, Huddersfield, Leamington Spa, Leeds White Rose, Loughborough, Luton, Manchester 90, Moorgate, Orpington, Rochdale, Scunthorpe, South Shields, Speke Park, St Albans, St Helens, Stockton-on-Tees, Tamworth, Teesside, Telford, Trocadero, Wakefield, Walsall, Walton-on-Thames, Wandsworth, Warrington, Watford, Wellingborough, Wigan, Wood Green, Workington

Scotland: Dumfries, Edinburgh Fort, Edinburgh Gyle Centre, Edinburgh Ocean, Edinburgh Princes Street, Edinburgh St James, Falkirk, Glasgow – Fort, Glasgow – Silverburn, Glasgow Braehead, Kirkcaldy

Northern Ireland: Ballymena, Belfast Boucher Road, Belfast Forestside, Coleraine, Craigavon, Derry, Lisburn, Newry, Newtownabbey

Wales: Wrexham

HMV pooch put down, Blockbuster busted

nippergonerHMV’s pooch has been put down. Staring into a rifle rather than a gramophone, Nipper’s one of the latest goners in the struggling high street. The question is just why exactly he and the chain have taken this long to croak.

His Master’s Voice had been shouting – with a sickly sore throat – for quite some time about how it is still relevant. HMV tried to launch a digital on-demand service, it committed more of its shelf space to electronics, and attempted to lift itself out of an inevitable quagmire. All the nostalgia is fair enough considering the brand’s longstanding legacy (though this Telegraph article makes a compelling case otherwise) – what doesn’t make sense is the illogical idea that Britain’s high street is integral to its national character or even its larger economy. Britain went through the luddite movement once already. Haven’t we learned our lesson? Once the technology is out there, you can’t turn back the clock, and trying to do so is understandable, but stupid.

Shopping online makes sense. This is why it is so successful. Given the choice between getting on a bus, standing in a queue, paying more, and with a limited selection – compared to one click ordering in under a minute, cheap, for exactly what you want or need – is it any surprise the consumer has largely chosen the web? It is possible that a retailer will figure out a hybrid model at some point in the future, and bargain or pound shops are unlikely to have many problems in a recession, but for the sort of commodities that don’t need to be tried on, the internet is a better option.

Any sympathies in wake of the bust must be directed toward the thousands of staff that lost their jobs because management refused to innovate in an age where taking risks and doing so is the  only way to succeed. Consistently playing catch-up, and thoroughly outpaced, it is a miracle HMV managed to hold on as long as it did. As for the unfortunate staff: let the demise of HMV, and all the others, work as a warning that in a permanently connected society it’s now nearly impossible to rest on your laurels and run a successful operation. HMV, of course, is only one of the most recent. Jessops (which previously shared the same chief executive as HMV’s last) was another casualty, before it, Comet, and before that, more. It has just been announced that Blockbuster will go into administration – South Park aired an episode about the inevitability of this outcome in October 2012.

Britain’s high street hasn’t been about some vague and nostalgic notion of community for a long time. Its steady transformation from local merchants and butchers to identikit hubs of big brand shops, that look the same in every British suburb, was complete years ago.

Adam Smith described Britain as a nation of shopkeepers, and that – first published in 1776 – is still true today. But it is something that must change. The high street’s death rattle has only just begun. An economy committed to hiring people to sell products – let alone barely producing –  is bound to fail, and we can only expect more casualties to come.

According to some critics, the blame is solely in the hands of management. Speaking with ChannelEye, Luke Ireland, business strategy adviser and non-executive director, said: “It is no surprise that we see three more major retailers succumb to the power of the internet.

“Don’t blame tax avoidance or government policy blame the management for not embracing the internet.

“It’s not going away and unless you fundamentally build it into everything you do your business will fail. I feel for the staff but if you work for a retail business which ignores the internet I’d look for another job.”

 

HMV “fights losing battle” for quite a while

HMV_NewcastleIllegal downloads, competition from online stores and legal streaming services have all contributed to HMV fighting a losing battle.

The once popular music store, which was a haven for 90s teens buying their first singles and albums, has become the latest casualty on the high street, announcing earlier this week that it was to go into administration.

The company, which has around 250 stores nationwide, made the announcement claiming that like-for-like sales were down 10.2 percent for the half year to 27 October and the Christmas period had not helped push profits up.

Trevor Moore, the former Jessops boss who took over as HMV CEO in August, said in a statement that the company had held discussions with its banks over the weekend but failed to agree on new terms for its debt.

“The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect,” he said.

Michael Perry, a retail analyst at Verdict, said the chain had been “fighting a losing battle for some time,” pointing out that it hadn’t been able to compete with the likes of Amazon on either price or range, while grocers had also been slowly claiming market share.

“Illegal downloading has also had a part to play, particularly over the last few years as consumers look to save money. To many, the monetary benefits of downloading outweigh the risk of being caught, resulting in online piracy continuing fairly unabated,” he told ChannelEye.

“The same can also be said for legal streaming services such as Spotify or Netflix, which have largely negated the need to purchase physical media for many consumers.”

And the public are also suffering. Not only are there around 4,500 jobs at risk, but customers are left with vouchers that they can’t use.

Voucher hell breaks loose in Blighty

davidwillettsSeveral people we know have lost quite a lot of money in Christmas presents owing to HMV going down the gunnel.

Our advice, then, to anyone who got vouchers as part of a Christmas present is, to spend, spend, spend.

One source told ChannelEye that her twin boys could not redeem HMV vouchers yesterday. So a net loss and a disappointment, for the kids,  by and large.

If you have a “voucher”, redeem it. And redeem it fast. Who knows which company is going to go down the tube, next?

There is somethimg very dodgy about this, and ChannelEye is watching it closely.