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HMV to shutter 60 stores
It's sad, but I don't think this morning's announcement from HMV that it's closing 60 stores after a rotten Christmas will come as any surprise.
Blaming everything - except the horrible atmosphere in its confused and curiously stocked-stores - HMV warned it was in danger of breaking the terms of its loans:
"The challenging entertainment markets, combined with the severe weather over our peak trading period have had a negative impact on our trading year to date. In addition, there are well-reported consumer headwinds as we enter 2011," said the company. Many retailers have warned that Britain's austerity measures, such as the VAT rise, will hurt them this year.The sort of cash-generative business that had like-for-like December sales plunge over 13% between 2009 and 2010.
"Given the difficult trading conditions over Christmas and the likely outturn for the year, the board now expects that compliance with the April covenant test under the group's bank facility will be tight and is taking further mitigating actions during the next four months to address this," HMV added.
Chief executive Simon Fox insisted that HMV remained "a profitable and cash-generative business and a powerful entertainment brand".
No word yet on which shops will be holding closing-down sales.
2 comments:
Hi
I am a member of the HMV Pure scheme - and I cannot tell you how ridiculous it is. In the 18 months that they have been open, the goal posts have changed 3 times. It now costs 75000 "points" for a £20 quid vouched that is only good in the stores and not online. (when I opened the account it was 50,000 points! While they seem to offer loads of tickets in exchange for the points, paging through that system is insanely time consuming. My suggestion is: If HMV wants to run a loyalty scheme look to stores like Boots, who do it flawlessly.
The "online" shop lists products as at least 35% LESS expensive than in store. Recently I purchased the cd I wanted in store and then returned it after I saw the exact same item for £8 less on the HMV website. The store experience is so disappointing that customers are almost chased to the website.
Why don't they look to amazing retailers like Concerto in Amsterdam to see how to run a successful business. It can't be that difficult.
I am not playing any violins for the demise of HMV
Is there anyone who doesn't have a CD with a ridiculous HMV price sticker somewhere in their collection? My CD copy of Green apparently cost £16.99 sometime in the mid '90's. These sods spent twenty odd years gouging the punter on CD prices and hoping that legislation would save them from the internet (online sales and digital downloads).
I feel for the retail staff who are going to lose their jobs through no fault of their own, but HMV the company has had this coming for a long time.
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