British High Street store HMV will inch away from CD and DVD retail and re-angle itself as a gadget seller, it announced today after another disappointing Christmas performance. With an 8.1 per cent yearly drop in like-on-like sales for the 2011 Christmas period, HMV is turning to technology to spare it financial doom. The …
"The grizzly sales drop"
I suspect you meant "grisly sales drop"; one means inspiring horror or intense fear, the other means hair that's streaked with grey.
My work here is done.
A grizzly sales drop is what happens when you're trying to operate in a bear market.
Not sure that pushing electronics / gadgets in an already crowded market (with significant low cost competition - Amazon etc.) is such a good idea - but the days remaining for physical media are seriously numbered - so have to do something.
Perhaps they would be better to open as coffee shops and a bar (with live music) in the evening.
Well, the one in Wimbledon has opened a cinema on top of it.
Pretty much next door to the Odeon.
Whenever I see the HMV logo now, I imagine that poor dog is staring into the barrel of a very large gun.
Didnt they just shut 10% of there stores??
So sales are down 8.1% on last year, but your selling from 10% less space? so in fact sales per shop actually went up..
But if you want to restructure your lone better for the bank to think your going to go bust I guess....
That somewhat assumes that those 10% of stores were worth 10% of the sales.
It's possibly that they may not have been making money or all, or very small amounts. Those 10% of the stores may have only represented 2 or 3% of the sales, meaning the overall more successful ones had an average drop of 5% or so, even after they were factored out.
You wouldn't shut stores that were making money, only the ones that aren't worth the trouble.
The fall will be like for like sales - standard measurement in retail so will exclude any closed or newly opened stores.
There used to be 2 stores in my town, now there is only one. Would you expect sales to half just because some people might have to walk another 150 meters to get to the shop?
Doesn't matter what they sell
The key is price, I don't mind paying a little more for a bricks and morter store, they have overheads to consider, however if somethings twice the price of a supermarket or online store I really, really, REALLY need to have it right now to justify the difference.
I was out with my son (who was eager to spend some of his Christmas cash on a new console game) - before we left I had a peep online and found it quickly around £15-16... - HMV price £41.99
Across the retail park (120 yards) - there it was - same game, same packaging - £19 - guess where it was bought...
So where did you buy it? The suspense is killing me!
Of course he paid HMV 100% over the local alternative. Oh wait. No - it was the other not-HMV place :)
Yeah! Gadgets! That'll do it!
HMV feels like another company that — having failed to win much market share on the Internet — should probably just accept terminal decline.
I don't think gadgets are going to work for them since they depreciate in value very quickly and are something people have no qualms whatsoever in sourcing online (unlike, say, clothes). So the comparison will be three-month old gadgets with the standard HMV markups to new gadgets via Amazon or direct from the manufacturer.
It's getting the right gadgets
If they just go for the bog-standard Currys-In-Airport-Lounge type gadgets e.g. iPhones, iPads, iPhad accessories wall to wall with iPhad styluses, iPhad chargers and iPhad cases with a few DSLrs and laptops thrown in for good measure... yes... they will lose.
If however, they choose to source gadgets that are only usually available online, quirky, thinkgeek type stuff; whilst not going full Maplins, but cater to a diverse group of geeky niches; they may find themselves eating a large chunk of a considerably tasty but neglected pie.
A smart CEO would take a risk and go for the latter, I suspect that HMV will end up going for the former.
Man alive, you're serious aren't you? Please God tell me there's nobody who relies on the decisions you make to keep them in a job.
The 'pie' you are talking about is minute. Tiny. Miniscule. HMV could have *all* of it and they would crash and burn like that Russian space probe.
"No, let's not sell products the majority of shoppers apparently want to buy, let's try selling those that the small minority want to buy, but will almost certainly order online because let's face it they're geeky anyway".
You can pull all the 'iPhad' stuff you like (way to get your idea taken seriously, by the way) but you don't get your way out of £160m of debt by catering to 'niches'.
So you've never heard of ThinkGeek, or passed a novelty/gadget shop on the high street then? There are plenty of real-life cases...
I assume you're a fanboi since you took umbrance at my iPhad word combination (iPad + iPhone)... so does Apple ring a bell - teetering on the brink of bancruptcy about 15 years ago? How about Continental Airlines? Priceline.com? Land Rover (was MG Rover owned)? Jaguar? Just to name a few.
OK so HMV would probably have to restructure, maybe rebrand, perhaps even eject or sell some of their core business streams or launch profitable areas as seperate business - many companies have done this and survived even in a niche market as the Apple or Land Rover for example.
$250m debt, yes you have a point there but that in no way warrants the tone of you reply.
>> But if you want to restructure your lone better for the bank to think your going to go bust I guess....
Oh really - yeah try that with your re-mortgage - tell them you have just lost your job and have 50k of credit card bills.
Surely if you want to restructure your lone [sic] it is better that they do not factor in that you are about to go bust.
Banks do not generally treat businesses as bad as they do individuals..
Same is generally true of anybody / entity that owes them sh*t loads of money compared to owing just a few grand.
I owe you 100 GBP - it's my problem.
I owe you 100 million GBP - it's your problem!
>> I don't mind paying a little more for a bricks and mortar store
You are very generous - if only more people were like you then HMV would not be going down the pan. HMV shareholder applaud you - unfortunately 99% of people want a decent price so buy online or supermarket.
I suppose supermarkets aren't made of bricks and mortar these days but then, are HMVs shops?
Little more means 5% or so, I'll pay that for instant gratification happily. RedLaser makes it easy to compare prices there and then, even though it tends to be too ebay biased since they bought it.
Sometimes they have blindingly good deals, unfortuantly HMW are usually at least 20 to 50% more than everyone else , or worse they have the item still at full RRP. Pity really as they have a large inventory of CD's but I'm not paying full RRP to backfill my collection. I buy used and online like everyone else.
Good point, Specialst store would have been better, supermarkets only have the top 40 of anything, be it books, dvd's or CD's.
> unfortunately 99% of people want a decent price so buy online or supermarket.
IME, quite a few people would like to support businesses like HMV. A *small* price difference can be ignored.
Unfortunately, the last few times I've been in HMV, they've had best part of sod all I want, and are *hugely* overpriced. To cap that, they insist on playing "music" I properly dislike at a volume far higher than I want for that shite.
 And I use the term quite wrongly.
 God, I have become my father...
high value items?
there really are some stupid people out there if they're buying that many high value items (especially tablets) from HMW who may not be around in a week that alone towards the end of the warranty period.
25% of headphone sales?
"Twenty-five per cent of headphones bought in the UK last year were sold by HMV, said PR chief Gennaro Castaldo, adding that the figure included 40 per cent of the vogueish Dr Dre Beats headphones."
REALLY?! I find that extremely difficult to believe that HMV have gained such massive market share - especially when not all shops have had the format change yet apparently.
Seriously, who buys an iPad from HMV?
Come to think of it, who buys Duracell batteries from HMV either? I've never seen a shop charge so much for them, and we're 20 years past the age of the Walkman, so what's the connection between music and AA batteries anymore?
Talking of Walkmans, I seem to recall being baffled by which morons were paying HMV prices for blank tapes back in the 80s too.
Seems to me that books and records are the sort of thing you might want to take a leisurely browse through in a store, with always the possibility of a "looks interesting, I'll give it a go" moment.
When I buy gadgetry, on the other hand, it's a few hours/days of online reviews and straight over to google shopping for the best online price.
Am I alone here?
I went into HMV during the christmas-new year break...i was going to buy some DVD and CDs in the sale...if the price was right. there was just one DVD on the shelves that was on my amazon wishlist...the price was right. just one DVD out of over 100 DVD/CD/games on my list. thats crazy. and i didnt buy that one DVD in the end either as i couldnt stand to wait 50 deep in the checkout queue. i think from that visit i can see their death.
If the checkout queue was 50 deep, they can't have been having that bad a Christmas, after all.
"Asked how HMV would differentiate itself from the existing players in the tech store space – PC World et al – HMV PR chief Gennaro Castaldo told El Reg that its more centrally located..."
I guess that's true... my local HMV has a PC World one side of it and a Maplin the other. Not sure that combination's going to help it sell more gadgets though!
Every time I go into HMV to look at the blu rays you've got to laugh. Full price for movies I bought months/years ago at a much lower price. Needless to say i've never bought a blu ray from a bricks and mortar HMV - although I have bought from them online.
They'll make the £160m back in a week.
If I were HMV...
I'd invest in creating a system that lets customers pick an album, burns the disc, prints a colour label onto the disc, and prints a jewel case label. They could even put together custom compilations from individual songs.
The end result would have to be better quality than someone at home with a typical inkjet and a lightscribe drive, but the savings over having to have CDs in stock would be huge, and it would have the advantage over online retail of going into a shop and coming out with the product, rather than waiting for the post.
But the technology side is all overpriced crap!
and the sales droids try selling you £50 HDMI cables!
Out of touch store
Even if you were willing to pay well over the odds (last-minute gifts), you may have mound that HMV (or at least my local store doesn't offer gift receipts on blu-rays/DVDs, so it make it difficult to use HMV for buying gifts over Christmas, because I can't guarantee that the gift recipients may not want to swap them. So, I just walked and used a different store and purchased something else.
I know they went under but I used to love and buy a lot from my local Fopp. When HMV bought them I had a small hope that they would replicate the model in some part to the HMV high street stores - glad I never raised my hopes up too high...
"I'd invest in creating a system that lets customers pick an album, burns the disc, prints a colour label onto the disc, and prints a jewel case label. They could even put together custom compilations from individual songs."
Yeah great - so you can take it home - rip it into iTunes (or whatever you use) and put it on your iPod (or MP3 player). Why not cut out the middle man and all that cost and just download it direct onto your device - that is the modern way.