This morning I just wanted to take five minutes (probably longer, knowing the speed I type) to recall one of the great Geek Media Emporiums: entertainment retailer (what was once called a 'record shop') HMV, last-man-standing in that retail category here in the UK.
Probably the most predictable failure on the British high street, the venerable 92-year old retailer (once part of the equally stricken EMI) called in the administrator last night after a long (and fruitless) battle to hold the line against online retailing and downloads (legal and otherwise).
There's always a chance that some or all of the business will be saved. I hope. The big London stores (at Oxford Circus and Piccadilly Circus) are still destination-shops, although I wouldn't like to bet that they generated enough sales to justify their vast size and (no-doubt) stellar rents. The VIRGIN MEGASTORE, at the Tottenham Court Road end of Oxford Street, struggled for years to successfully fill its multiple floors (the basement, once home to video and then sub-let to a musical instruments seller) eventually became a discount books department which was always worth a browse.
HMV's FOPP stores (once a stand-alone chain that expanded too quickly and went bust) are few in number but a reliable place to pick up bargains, especially films you would never dream of paying full price for but you think you should see. That feels like a business model (assuming it can standalone without the HMV mothership to supply overstocks and overall buying power) that could survive, if the margins are sustainable.
HMV's other problem, as a quick glance of the online forums will tell you, is that they were (generally) massively uncompetitive. The occasional in-store offers were cheaper (and ideally priced for "oh, go on then" impulse buys) but, overall, shopping online was always going to be cheaper. The reasons are obvious but the disparity was often so large that it just looked like they were taking the piss. Plus, there was always that sneaky suspicion that HMV (and others) were fleecing buyers. A suspicion apparently confirmed once the world realised how easy it was to burn a CD or DVD at home.
They were also slow to spot the potential of the internet. Their website, presumably an evolution of their HMV Direct customer orders sideline launched in the 1990s, originally matched the prices charged in the shops which - predictably - placed it at a massive disadvantage compared with competitors Amazon and Play.com. They eventually abandoned that model in favour of a parallel system where online prices were often different to the price in-store. But that makes the marketing that little bit harder. Despite heavy promotion in-store, the two businesses seemed to operate in splendid isolation: try using a store-issued HMV refund voucher online... and fail miserably.
The chain has been shrinking, and trying to reposition itself, for a while. A wave of smaller stores (including the two nearest to where I live) closed a couple of years ago. The remainder had been down-scaling their entertainment offering in favour of gadgets and technology (a strategic decision I could never understand: its another highly competitive category, far less prone to impulse buying and already well-served by online retailers). I was in the Canary Wharf branch over the Christmas break and I found browsing the DVD shelves a stressful experience as there was no room to look without colliding with other customers trying to do the same thing. And I left empty-handed.
The more cynical part of me thinks that management have been preparing for this moment for a while. A few years ago they expanded into live music, buying a number of venues (including the Hammersmith Apollo) and it seemed to show signs of being a good strategic move, albeit not one that was going to save the retail side in the long run. Then they reversed-direction and sold the live business. It didn't seem to make sense to sell a profitable devision... unless they wanted to strip-out the good parts before the whole thing imploded. The Waterstones book chain, another (almost) last-man-standing in retail (following the closure of Borders' UK stores), was also sold-off and (fingers-crossed) does look like it has a future.
Last Friday, all HMV and FOPP stores started a blue cross sales event. In the case of HMV branches, that meant a 25% discount across almost all entertainment products (with a few exceptions like items already on offer and new releases). Forum members online were quick to point out that - in some cases - stores had bumped-up the sticker price just before the sale. And, in many cases, HMV prices were so high to begin with that, even with a 1/4 discount, online was still cheaper. Nevertheless, I still picked-up a bunch of BR's, DVDs and limited edition soundtrack CDs at a reasonable price.
The blue cross sale had a whiff of finality about it. The sheer amount of stock reduced suggested that the chain had no plans to replenish what they'd sold (even if they had the cash to do so, which considering their dire financial position, seemed unlikely) which - to me - signalled their intention of getting-out of selling back catalogue items altogether (which - in turn - made me doubt that they would need to retain the vast Oxford Street flagship). Slapping a blue cross on everything also seemed the most flexible way of varying the discounting: just change the point-of-sale to a new reduction without the hassle of relabelling all that stock. Now, unless a retail miracle happens, it looks like that sale will morph into a closing down sale.
When I first moved to my current neighbourhood twelve years ago, the nearest shopping area had branches of HMV, Virgin (almost certainly a former Our Price store, then trading under the V Stores facia), Woolworths (the venerable - and much-missed - general retailer which always boasted a big entertainment department, ideal for the odd bargain and impulse buy) and WH Smith (which also had a big entertainment offering). Now, only WH Smith is still in business (and their entertainment "department" is a few chart DVDs bunged on a shelf behind the lottery 'till) along with a limited chart offering in the local supermarket.
A roll-call of failures in the sector include (in no particular order):
Virgin Megastores/ Zavvi - The Virgin chain expanded swiftly in the eighties and nineties, at one point under the ownership of WH Smith. They moved back to the Virgin Group but Branson was smart enough to see the writing-on-the-wall and sold the chain to its management team - and insisted on a name change - a few years before it imploded in January 2009. Some stores even had a comics department in the 1990s. The in-store offering eventually became a concession operated by Stateside Comics... before they went bust in the speculator boom/ bust.
V-Stores - the high street incarnation of Virgin, offering a weird mix of recent releases, mobile phones and an ordering service which seemed to fail to anticipate the growth of online shopping. These were all closed in favour of the larger megastore format.
Our Price - which became part of the Virgin chain after a period of ownership by WH Smith. The company operated a chain of stand-alone VHS stores in the early nineties under the Our Price Video facia. These eventually rebranded as Playhouse Video before vanishing.
MVC - Music and Video Club, at one time part of Woolworths which then became an independent company and folded in 2005.
Music Zone - which folded in early 2007, passing 67 stores onto FOPP.
FOPP - which, after adding the Music Zone stores, hit financial problems in the summer of 2007. A rump of stores, along with the brand, are now operated as a discount outlet by HMV.
FOPP - which, after adding the Music Zone stores, hit financial problems in the summer of 2007. A rump of stores, along with the brand, are now operated as a discount outlet by HMV.
Andys Records - The chain, once big enough to advertise their wares on TV, went into receivership in 2003.
Tower Records - The US chain opened their first UK store, on London's High Street Kensington, in 2004 followed by their "megastore" at Picardilly Circus the following year. The struggling chain retreated from the UK in 1984, selling the London flagship to Virgin (who closed their own "spoiler" branch at Piccadilly Circus).
Sam Goody - The Us retailer came to the UK in the nineties, offering stores with an extensive back catalogue. It retreated again several years later.
Borders - The US retailer opened a number of vast book stores in the UK beginning in 1998, all with large entertainment offerings. When the US chain started to falter, these were sold-off in 2008 and - after a slow demise - collapsed in December 2009. The chain also operated the Books Etc. chain (converting some to the Borders Express facia) which shuttered, shortly before the main chain, in 2009. In a sign of things to come, the flagship Oxford Street Borders was closed when the lease was sold to fashion chain New Look. The rush to leave the site meant much of the stock (including a large number of remainders and seconds clearly shipped-in from other branches of both chains) was sold for a £1 a time, generating more bargains than the actual closure of the chain. Borders could also be relied upon to - periodically - cut the prices of their entertainment stock massively, presumably ever time a big bill arrived at Head Office and some cash was required.
Woolworths - The 99-year old general retailer, divorced from the US operation since the 1980s, was such a part of British society (at its demise, it operated 900-odd stores and most British high streets could be relied upon to have a branch) that it seemed unthinkable that it would vanish completely - and so quickly - despite its well-publicised financial woes. When the end came, it came quickly. And I frequently still find myself thinking "I'll get that it Woolworths..." every so often.
Head Entertainment - Was a short-lived spin-off of Zavvi, created when senior staff bought five stores, and the chain's remaining stock, from the administrator of the defunct former Virgin chain (HMV snaffled up another fourteen). The mini-chain folded a year later, presumably after maximising the value of the purchased stock.
Silverscreen - Was a specialist DVD retailer (shades of the failed Our Price Video/ Playhouse chain) that grew to sixty five stores before collapsing in March 2006.
Head Entertainment - Was a short-lived spin-off of Zavvi, created when senior staff bought five stores, and the chain's remaining stock, from the administrator of the defunct former Virgin chain (HMV snaffled up another fourteen). The mini-chain folded a year later, presumably after maximising the value of the purchased stock.
Silverscreen - Was a specialist DVD retailer (shades of the failed Our Price Video/ Playhouse chain) that grew to sixty five stores before collapsing in March 2006.
MY HMV MEMORIES:
- The in-store DJ/ radio station in the Oxford Street flagship. The booth was on a little platform next to the escalators in the middle of the store. Once they scrapped that idea (Virgin Megastores also had an in-store radio station but - presumably - HMV figured it was cheaper to simply play the latest greatest hits CD compilation), the platform (with a weird pyramid design of upright metal bars, seemingly designed to be a head-hazard) became the mini-disc section. Before being ripped-out in a refit.
- BIG BREAKFAST presenters Chris Evans and Gabby Roslin opening the new "Entertainment One" department on Oxford Street's first floor sometime around 1993. The department housed VHS tapes and video games (DVDs are still upstairs today, games moved downstairs).
- A personal appearance/ signing by DUE SOUTH stars (and a stand-in husky) Paul Gross and David Marciano to promote the Clear Vision VHS tapes.
- Thinking absolutely nothing of paying £10.99 (or more) for a VHS tape containing two episodes of a desired TV show. Now a canny shopper (even in HMV) could hope to pick up a whole season for less.
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