Ailing HMV sees tech sales' bright spot among dire music biz
Behold, His Master's
Struggling music retailer HMV has reported that its technology sales jumped 42 per cent, after it refitted more than half of its stores to focus on punting fondleslabs.
The company, which owns 252 shops throughout the UK, is slowly morphing its stores into retail outfits that also sell tech gear in an effort to survive on the bloodied High Street.
It said it had refitted 144 stores to offer customers a range of portable digital products, including tablet computers.
"Like-for-like sales in those outlets had grown 42 per cent since respective store refit dates," HMV said. "Like-for-like sales growth across headphones, speakerdocks, and tablets has been 147 per cent since refits," it added.
However, the company admitted it will have to sell its Live division. That wing of the business runs 13 venues and several music festivals including Lovebox and Global Gathering.
HMV reported a dire pre-tax loss of £45.7m in the first six months of its financial year, which ended on 29 October. For the same period in 2010, the firm vanished £27.4m from its fiscal statement.
It added that in the seven weeks leading up to Christmas - as of 17 December - HMV's like-for-like retail sales dropped 13.2 per cent.
“This has been a challenging start to the year. However, we have taken decisive action to restructure the business and are now seeing the benefits of this, particularly in our technology products business," said HMV boss Simon Fox.
"Like all consumer-facing companies we are facing tough trading conditions but we continue to push forwards through this period. We remain well prepared for the key trading days ahead.”
The company said total sales from continuing operations for the first half of the year fell 17.6 per cent to £364.9m compared with £442.7m for the same period a year earlier.
Shares in HMV are currently trading down 8 per cent on the London Stock Exchange following the company's latest financial results report. ®
I wouldn't be against this idea if
a) the catalogue of titles available wasn't simply a duplication of the existing stuff they're trying to flog, but a full catalogue of anything and everything that has ever been released
b) the service allowed for "pick and mix" compilations as well as reproductions of the original albums
c) the price of each track/disc was reduced in recognition that the disc you're buying isn't a factory-pressed original with an expected lifespan of several decades, but rather a CD-R with a generally somewhat reduced life expectancy
"Does it think becoming another technology reseller like PCWorld/Currys is going to save it"
To be honest, I think they're in with a reasonable chance. I had a browse in their revamped Westfield Shepherds Bush store recently and was pleasantly surprised. All the tablets and laptops I looked at were powered up and unlocked, giving customers the chance to have a proper play with them, as opposed to the policy in certain other stores where everything is stuck on the password entry screen so all you can do is wiggle the mouse pointer around and get a vague idea of the screen quality based on whatever static image it happens to be displaying. And given the sorts of locations they've got, they could appeal to the impulse buyer doing a bit of window shopping in their lunchbreak where the sudden urge to buy something right there and then could override any thoughts of "ooh, let's just check it out here and then order it online when I get back to the office/home", whereas the out of town warehouses operated by DSG/Comet don't have as much scope for grabbing that sort of customer.
It needs to rethink it's CD business. The expense and logistics of shipping very specific CDs to store could be replaced by an in-store CD burner and glossy printer.
Why go through all that effort of delivering what is essentially digital media when it could all be done through a kiosk and a fast internet connection? Each HMV store would have instant access to every CD available.
Unfortunately the content providers would never agree to this, and this is the reason HMV is bound for bankruptcy. Does it think becoming another technology reseller like PCWorld/Currys is going to save it?
I'm sure they do, but it's the stores that are in trouble.