HMV and the Destiny of the Humble British High Street

HMV

By Jessica Cullimore

On 15th January, 2013, our beloved high street entertainment retailer HMV entered administration.

HMV was founded in 1921 with its first store on London’s Oxford Street. Ever since it has had a firm presence in almost every high street in the UK and this news splashed across the headlines brings uncertainty about the destiny of the humble British High Street.

Around 4,500 jobs are at risk at the 90-year-old retailer following poor results over the crucial Christmas trading period, when it traditionally makes most of its sales. A weak economy in the run-up to Christmas did not help with the already troubled company. Their business models were already overwhelmed by competition from supermarkets, online retailers, and extreme technological advances, namely, the explosion in internet downloading which undermined the demand for their CDs and DVDs.

With consumers less keen to spend over the key festive period, a make-or-break time for struggling retailers, HMV was unable to prove to their financiers that they have a viable business model and Deloitte was appointed to deal with the administration of the company as their £176m debt became impossible to pay. 

Although it is still early days, we can’t help but feel that the downfall of a retailer, with such a strong historic presence in our high streets, follows a trend that is becoming all too clear: the death of the high street. With our generation being the first to grow up with the phenomenon of ‘online shopping’, how can we expect our high street retailers to survive when we claim most of our purchases from online stores? If we continue in this way, we are going to have to question, are future generations even going to know what shopping in real shops on an actual street is?

However, there is still hope! Despite its uneasy position, HMV still sells 27% of all DVDs and Blu-Ray Discs and its sales constitute 38% of the physical music market. This impressive domination of the market has interested investors to the troubled retailer and on 22nd January 2013, a week after announcing its administration, it was reported that Hilco, the retail restructuring group, would buy the debt of HMV, effectively taking control of the company and keeping their stores on our streets, at least for now.

Photography: by Kake Pugh on Flickr (CC BY-NC-SA 2.0).

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