Announcement of HMV closures from one independent’s perspective

HMV nipper-the-dog classic logoIt is my understanding that the first list of closures were as much about exiting long expensive leases as about loss making shops. No shop is “safe” even in the short term as another list will follow. As a separate company wholly owned by HMV the FOPP stores were never going to appear on the list so nothing can be read into their absence. The administrators are currently trying to make HMV look as attractive as possible to a buyer and there is no reason that once all the Edinburgh stores are closed another couldn’t be reopened by the new owners in a more suitable location and of a more appropriate size.

What is clear is that for at least the last two years (coinciding with Avalanche’s move to the Grassmarket) independent shops have been asked to compete with a large business not operating in any way in a business like manner and propped up by not just major record companies but independent distributors and labels too. Many indies have closed in that period, the much loved One Up in Aberdeen only being the latest, as they were not only expected to compete with unfair competition online but also unfair competition on the high street.

The delusion that FOPP is profit making is not borne out by their publicly available accounts which are engineered to show a tiny profit but with many overheads and costs paid by the parent company HMV. Sales dropped by 3 million alone from 2011 to 2012. 

It does look likely that the profit making flagship store in Oxford Street  will be sold and that generally what remains may not be the best 60/80/100 shops as some or possibly many of those may be sold as part of bids by Game, the supermarkets and other interested parties. There is the possibility that what is left is not a viable chain. The HMV brand of course will always have a value in its own right.

Obviously things are changing all the time and what is thought to be the position this week may not be so next week. This is simply the position as I currently see it given the information publicly available and from others in the music industry.  My personal opinion remains that a slimmed down and well run HMV is necessary if the music industry is to avoid the unhealthy dominance of online sellers and supermarkets who do nothing to promote music but cream off most of the sales.

I understand why HMV were supported for so long but this crisis should have been faced two years ago rather than blindly hoping things would get better. Independents can no longer be the collateral damage in an attempt to keep HMV trading.          

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