His Master’s Voice: a British institution since 1921, HMV has been a staple of the UK high street for nearly 100 years. In recent times however, as with many British retail brands, the entertainment retailer has fallen on hard times.
Since going into administration for the first time in 2013, HMV has had a chequered history in a massively declining market. Finally, in 2019, the company entered administration for the second time in just five years. As of now, no buyer has been found and the brand’s heritage remains in jeopardy. But where did it begin and what can we expect to happen in the coming months?
The History of HMV
HMV started in the early 1920s as a single store opened by the Gramophone Company on Oxford Street in London. The company also used the HMV name to sell own-brand television and radio sets from the early 1930s.
Expansion soon followed, with the retail side of the business really taking off in the 60s. HMV stands, as most of you will know, for His Master’s Voice, the title of a painting by Francis Barraud of the dog Nipper, who became an icon of his own, listening to a cylinder phonograph, which was bought by the Gramophone Company way back in 1899.
From 1998 until 2011, the HMV group, still trading well, owned the Waterstone’s book company and when Zavvi group entered administration due to declining sales in 2009, HMV was quick to purchase numerous stores in what seemed to be profitable locations.
However, in 2013, the chain entered administration and appointed Deloitte to deal with the resulting fallout. The result was massive store closures and thousands of job losses. Nevertheless, the chain found a buyer in Hilco and many stores remained open across the UK.
Unfortunately, due to poor trading in the run up to Christmas 2018, HMV announced once again that it would be entering administration. At this point, no buyer has been found.
What Happened to HMV?
As a sad sign of the times, HMV, along with Woolworths, Comet, House of Fraser and many other British brands have seen continuously declining sales with people turning to online shopping because of its ease. While HMV’s market share, especially in the resurgence of vinyl records remained strong, they simply cannot compete with the likes of Amazon and Zavvi who retail solely online, mitigating the costs of building rents and staff costs.
This sad state of affairs has led to declining footfall in British city centres, the main locations of many HMV stores. While many individuals, including myself, enjoy visiting a bricks and mortar store, the draw of online shopping has been one of many nails in the coffin of HMV.
In a study by Statista.com, in 2008, only 53% of Britons made purchases online. Ten years later, this figure has shot up to 78% and while HMV does indeed have a website to buy from, it simply doesn’t have the pulling power of Amazon.
The Resurgence of Vinyl
The popularity of vinyl records has been somewhat of a lifeline for the struggling retailer. In September 2018, it was reported that HMV sold over a third of the UK’s vinyl and reported a 40% lift in sales for the retro medium.
With a share of over 32%, HMV left Amazon trailing in second place. However, the market for vinyl is still relatively small and with sales of traditional DVDs, CDs and Blu-Rays falling due to the rise in streaming, this lifeline simply wasn’t big enough.
“During the key Christmas trading period, the market for DVDs fell by over 30 percent compared to the previous year, and whilst HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable” Paul McGowan, HMV Executive Chairman
The Diversification of HMV
If you’ve been lucky enough to step foot in one of HMV’s 125 stores in the UK, you’ll have noticed a massive change in the range of products that they currently sell. No longer are they solely a stockist of films and music. In fact, their product range is vast with merchandise and electronics taking up retail floorspace. From POP Vinyls to record players and from graphic novels to t-shirts, they have responded to a declining physical entertainment market with flair.
The issue that remains is their core customers: they remain a niche segment of the market. Those interested in merchandise, comics and entertainment may not be enough to sustain a business model that has over 100 stores, with rent, utilities and staff costs to go alongside those. Like GAME, the video games retailer, this is a tough corner of the market with very little room for error.
Nevertheless, the retailer has responded numerous times to claims it was far too expensive by lowering their prices, making them competitive against online retailers like Amazon and Zavvi. There’s something incredibly satisfying about flicking through vinyls and looking for that elusive film you’ve been after for months, rather than simply ordering it online and waiting a few days for it to arrive in the post.
What’s Going to Happen to HMV?
This is a difficult one. After all, rescuers can be found at the 11th hour. Mike Ashley, owner of Sports Direct, has saved the majority of House of Fraser stores in the UK, but HMV needs to find a new owner and fast.
If they do, we can hope that they diversify the product range even further to attract new customers into their stores. Adding more vinyl to their product range is sure to please the rapidly growing record market.
If they don’t, it’s yet another historical British brand that disappears due to the huge surge in online shopping and one that will be very sad to see. Take a visit to your local HMV store and browse through their fascinating product range – you’ll be pleasantly surprised by what you find.
Use it or lose it, we don’t need yet another UK chain to disappear forever. His Master’s Voice hasn’t lost its bite, we just need to get behind it.