Lost in Music: The Depressing Demise of HMV

HMV has squandered its place as the quality mass-market music retailer. This is a loss for all of us.
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LONDON, ENGLAND - JANUARY 15: A pink sign glows at the entrance to the HMV music and video shop in Piccadilly on January 15, 2013 in London, England. Management have announced that administrators have been called in which may put the 4350 staff at risk. HMV was founded in 1921 has 239 stores in the UK and the Republic of Ireland and has struggled to compete against online retailers. (Photo by Peter Macdiarmid/Getty Images)
LONDON, ENGLAND - JANUARY 15: A pink sign glows at the entrance to the HMV music and video shop in Piccadilly on January 15, 2013 in London, England. Management have announced that administrators have been called in which may put the 4350 staff at risk. HMV was founded in 1921 has 239 stores in the UK and the Republic of Ireland and has struggled to compete against online retailers. (Photo by Peter Macdiarmid/Getty Images)

For anyone with even a passing interest in music, the demise of HMV is depressing. The chain has appointed Deloitte to run the business and has suspended its shares while potential buyers are found. 4,350 jobs are at risk but it is not closed. Not yet at least.

As a teenager, I loved and practically lived in HMV. It was always the high point of the high street. I'd slip in at any opportunity, scouring the racks for bands I had heard of, discovering bands I had never heard of, reading the liner notes of both through the shrink-wrap. If I had money, I'd even buy something.

HMV was classier than the other chains -- less glitzy and with better stock and staff than Virgin and more depth and variety than Our Price. In HMV, people at the till would comment on the music you bought or suggest something you might not have heard of, or at least know what you were talking about if you came in with an obscure query.

For me the nearest indie was Spillers in Cardiff -- smaller but even better than HMV. If you lived somewhere without a shop of the stature of Spillers, then HMV was OK though.

Many will look at the staggering rise of Amazon and blame it for the decimation of High Street, coupled to the dire state of the UK economy. But Amazon's advantages -- no stores, no paying any UK tax -- while significant were not the killer blow for HMV. HMV botched everything all by itself by taking the focus off its core business, and flailing and forgetting its customers when it should have been offering them something of value.

In truth, HMV has become one of the most depressing shops on the high street. In the past it had a simple focus -- music, where it excelled. For a long time it was even cool, the Bowie of the high street -- popular but credible. For many years now it has been more like Cliff Richard.

Pictures of HMV's flagship Oxford Street store from the 1960s show it to be a music Mecca and stylish place to hang out. Cementing its premium position were knowledgeable staff keen to help, elevating it above the other chains.

HMV was for a long time the best record shop chain in the world, its logo dating from 1899, but managed to reinvent itself to remain relevant. Its website has the optimistic but now rather disingenuous claim: "HMV's dog and trumpet has entertained for over 90 years, and remains as relevant today to entertainment lovers."

The formula was pretty much unchanged until some time in the early 1990s when the market began to shift. Vinyl was out and CDs flourished as people replaced their record collections. Stores could hold more of the smaller CDs and the staggering choice prompted a surge in sales.

At some point a crucial mistake was made -- the company decided to effectively jettison customer service. Music, films, whatever stopped being things to enjoy and treasure -- important things -- and were instead sold as mere commodities. This was absolutely not the fault of the staff, but of the management. This decision had important knock-on effects. Stores became increasingly depressing, with increasingly stressed staff.

And yes, HMV was clueless in selling anywhere but the high street, completely neglecting online sales until Amazon and Apple had that market pretty much sewn-up. Soon they became clueless at selling on the high street too. HMV would always have sold the equivalent of Susan Boyle, but also a credible back catalogue. Now, if you want that classic album HMV is unlikely to have it, but even if it does it won't be reasonably priced. You will find umpteen NOW and Ministry of Sound compilations, however. Yet another gift to Amazon.

Pre-tax profits at the group rose steadily to reach a peak of £121m in 2005 before beginning a rapid decline, to a loss of £48.6m in 2012. It sold the Waterstones book chain, ironically the most profitable part of the business, and it's half-dozen HMV-branded music venues including the iconic Hammersmith Apollo. To little avail.

At the same time, independent stores all over the country from Rough Trade and Sister Ray in London to Spillers in Cardiff and Piccadilly in Manchester began to innovate. They made music important to the customers by discovering and championing new music and making it vital. They remain a pleasure to shop in.

HMV also changed its focus from music to DVDs, where the profits lay. It is already part-way through a new change to focus on gaming. According to HMV's last published interim results in December for the six months to 27 October, total sales were down 13.5 percent, losing the company £24m.

Chief Executive Trevor Moore, the man ironically credited with saving Jessops, admitted that: "HMV has had a difficult first half. However, the business has started to deliver a number of new initiatives which will help to maximize the seasonal sales opportunity and provide a platform for growth in 2013."

What these new initiatives are or were, your guess is as good as mine.

HMV has squandered its place as the quality mass-market music retailer. This is a loss for all of us. The bad news is that the mismanagement of HMV has given non-taxpaying retailer Amazon the perfect platform to grow and further erode high street music sales. The good news is that a management with an ounce of sense can turn at least some of the business around although some of the stores are certain to close.

Lets hope that whoever takes the helm continues to give quality music to people, so teenagers can become literally lost in music in the racks at HMV, just like I did.

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