HMV Rises From the Dead, Opening New Stores10 Jul, 2014 By: Erik Gruenwedel
Venerable U.K. entertainment retailer has successfully emerged from bankruptcy with expansion on its mind, operating a business model predicated on packaged media
HMV (“His Master’s Voice”), the longtime British entertainment retailer (founded in 1921) with the trademark logo of a fox terrier peering into a wind-up gramophone, reportedly is set to open four new stores (to 129 total) after generating more than $800 million in annual revenue.
The London-based retailer, which emerged from administration (a form of British bankruptcy) in April 2013 after being acquired by Hilco, generated more than $1.2 billion in revenue when factoring in operations in Canada and Ireland.
HMV generated 9.2% same-stores sales increase, according to Retail Week, which reported the privately-held retailer’s fiscal-year financials ending June 30.
The chain, during administration, streamlined internal operations, shuttered unproductive stores from a base of 244 locations, and focused on in-store customer relations at a time when digital distribution and Amazon continue to grab market share in sales of music, movies and video games.
“Physical album sales are remaining steady,” HMV chairman Paul McGowan told Retail Week. “Amazon, Tesco, Asda, and Morrisons all provide a physical offer, but they can’t provide the type of experiences HMV can.”
Indeed, the chain earlier this year aired TV spots featuring its iconic dog dressed in superhero garb for a series of Blu-ray Disc and Easter CD and DVD releases, and children’s themed books. It also launched an app, customer loyalty program and revamped its website.
HMV is also benefiting from a UK market that continues to value packaged media. The market in the third largest in the world, according to IHS.
HMV took home “Retail Marketing Initiative of the Year (2013)” from the British Video Association for its “HMV Decades Campaign,” which judges lauded for driving shoppers through its doors and getting them interested in film and TV catalog. Specifically, HMV staffers dressed up to match their favorite decade.
The chain plans to redouble in-store marketing efforts surrounding key movie and music album releases going forward. Last October, HMV hosted Paul McCartney to an in-store concert — among more than 100 events in the fourth quarter — that reportedly lasted six hours.
“The heritage is there, but we want to keep building on it,” McGowen told GQ in the U.K. “One of the disappointing things is that in recent years, in terms of content, [HMV] was a little lax in recognizing what they were actually having in the stores. We want people to understand and get the feel of what the store was like. It's about saying HMV is back, but HMV is about entertainment and the industry respects that that is our position in the three countries we currently operate in.”