The End of HMV, Part 2

‘Despite the well publicised state of the UK retail environment, HMV remains profitable, demonstrating the success of the turnaround programme instituted five years ago,’ said Paul McGowan, executive chairman of HMV owner Hilco Capital (September 2018). 

As Nipper may be silenced from barking permanently, I felt that it would be a good idea to write down some thoughts on the closure of HMV, considering that it so forcefully impacts the world in which I reside. You probably didn’t know that the name of the dog in the HMV logo was Nipper. If truth be told I only found this out when I actually worked for the company. But I want to make clear that I’m not writing this article as some insider or some higher authority, since I spent a few months working for HMV in Edinburgh and a few weeks over one Christmas working for HMV in Newcastle, and that pales in comparison to the hard working people I met during that time who’d spent years – if not decades – working for the company.

In Newcastle, for example, I met a man named Keith. I always loved the phrase that he used when he said he wore the HMV shirt to work like a footballer strolled onto the pitch in his kit. There was a certain sense of passion I always encountered in HMV that was sorely lacking from other establishments. I first started visiting HMV Newcastle regularly in 2012 and the genuine knowledge of the staff stood out from a typical high street chain. I mean, granted, I’m not sure I’d ever strike up a conversation with someone about my Whopper in Burger King but I do think that stores like Game have never really employed staff with the kind of passion for their market I’d of expected.

In 2013 I watched on as, having already worked for HMV in Edinburgh during 2008, it looked as if HMV was closing down. Several stores paid staff redundancy, they cashed out their pensions and walked away, yet after two weeks they were getting phone calls asking them to come back. It’s funny now because I suppose in that situation you’d have to see anything as temporary. But as the years began to pass once more you couldn’t help but get comfortable. Yes, it was a new contract, but this was the job you’d held all those years previous. And lightning couldn’t strike twice, could it?

Vinyl is a great passion of mine, but there’s no doubting it’s expensive, with the average record costing anywhere from 20 to 30 pounds. Tesco sell Vinyl, and so do Sainsbury’s, but the selection in HMV is unrivaled. And unlike cassette – or even CD – it’s relatively difficult to just walk out the door with Vinyl records under your coat. I’m not saying they’re theft proof, I’m sure some have tried, but it would be a lot more challenging than your average Blu Ray. When HMV announced the administrators in 2013 several thousand flocked to stores in the space of days, purchasing goods that were discounted up to 80%, sales which ironically held a part in saving the company. But this time you have to imagine that HMV simply doesn’t own their stock, that so much of it is held on credit, agreements made that ensure closing the store would result in that stock being handed back to its legal owners.

I remember when HMV sold iPhone in 2009 and people were quick to blame expansion like this as the reason for its downfall. The “rebranding” in 2013 promised that they’d be reevaluating their position in the market. I know that in 2015 they were reporting financial profits and their Vinyl sales had an exceptional profit margin. You didn’t have to be a staff member to know this, an article dated from September 2018 explains that HMV had outsold Britain’s four biggest supermarkets combined, and was experiencing a 27% surge in sales. The same article also quotes HMV’s profits before tax at 8 million in 2017 compared to 10.7 in 2016.

https://www.thisismoney.co.uk/money/markets/article-6222335/Now-thats-record-HMV-sells-Britains-vinyl-CDs.html

Reading this article you wouldn’t imagine it was only a few weeks ago. So what happens in just a few weeks that threaten the jobs of 2,200+ people and countless other distributors and marketing chains? If we do live in a world where Amazon is being told by the consumer that, while it has its place, they prefer the physical touch – why has HMV struggled to get through another Christmas?

The largest part of my belief is that credit can only be extended for so long, and that although certain elements have performed well, the sales of DVD and Blu Ray have massively fallen. When I visited my local store last night I considered purchasing Rick and Morty Season 3 (Pickle Rick!) but sadly reminded myself that I would be spending 20 pound for something already available as part of my Netflix package. There’s even an argument to be had that downloading illegal files is more time consuming then just powering up Netflix, Prime, Hulu or whatever you fancy and scrolling for something to watch.

On the same token, Spotify can be told what to play by Alexa, so why do we need to purchase a CD with limited capacity for playback or – god forbid – fill an MP3 player. Why spend money on an iTunes account when their streaming services will simply play you an unlimited amount of music, whatever your mood or your feelings, and you can toss away that music just as soon as you’ve found it. I could write another article on that alone. But the point is that it does impact the way we spend our money. A friend of mine has a car that he uses his CD player in, and if it wasn’t for this device and the fact he too used to work in a retail store, he tells me confidentially he’d never buy another album that wasn’t on Vinyl.

When it comes to the rows of Funko Pop vinyl and T Shirts, HMV is leading the charge, but the reality of what people will buy is far different. Regardless, I’m hoping my colleagues are able to begin this year with a sprinkle of hope and that even if the worst doesn’t happens they find themselves back on their feet as soon as possible.

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