HMV in administration: putting 4,500 jobs at risk

by liamssoft | January 15, 2013 at 02:52 am

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HMV could be forced to close its shops and lay off 4,000 staff after going into administration

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HMV could be forced to close its shops and lay off 4,000 staff after going into administration

HMV remains, to this day, a respected and loved brand. Our emotional connection with music means that consumers, of all ages, will have fond memories of the store. However, emotions don't pay the bills and the blunt truth is that HMV did not react early enough to the digital trend; it did not give shoppers a reason to keep buying from it. Admittedly, the company has tried to innovate through selling more electricals and gadgets but, unfortunately, these initiatives were never going to be enough to counteract the terminal decline in its core business.

Comet and Jessops, now HMV. Is there more trouble in store? Since 2007, the [internet's share of] retail sales (excluding motor fuel) has risen from less than 4% to over 10% – with internet spending growing at around 25% per annum in value terms.

Retailing faces a big adjustment to the "new normal" world of constrained finance, higher inflation and weak confidence. The growth of online retailing will contribute to this process of structural change.

Retailers which can realise the cost and convenience advantages of multi-channel retailing will be much better positioned to achieve sales growth and protect profit margins than those locked into large legacy property portfolios.....Read more

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