Things Looking Fine at HMV Canada
There have been plenty of stories coming out of the UK about the dire problems being faced by HMV. However, it needs to be emphatically stated that HMV UK and HMV Canada are two separate animals. Our HMV is in good shape.
[Full disclosure: I do work for HMV Canada. But this also allows me to attest to their condition with some authority.]
The Globe and Mail has a big story on the front page of the business section today. While there are challenges in the retail environment–well, duh. Have you seen the decline in CD sales?–there’s still plenty of room for optimism at HMV HQ.
Nick Williams is striding on ground where others have stumbled.
The chief executive officer of music chain HMV Canada is embracing bricks and mortar even as other major specialty retailers have been squeezed out by low-cost digital alternatives and big-box stores.
This holiday season, a crucial period when HMV generates about one third of its annual revenue, it has added six pop-up shops to its 113-outlet chain after having closed eight stores and downsized others in the past year or so. It’s counting on the temporary locations to catch a seasonal burst of sales and act as a laboratory for future growth in a fading music industry.
“Everybody talks about it all being about digital – it’s not all about digital,” said Mr. Williams, whose chain was sold by struggling British-based parent HMV Group PLC to restructuring and private equity firm Hilco for $3.2-million last year. “There’s still a strong appetite for physical product, both music and film.”
HMV is betting that appetite still has a healthy run ahead.
To differentiate itself, HMV is stocking a rich offering of back-catalogue music and movies that aren’t carried at discount rivals. And beyond CDs and DVDs, HMV is also branching out into higher-margin merchandise – gifts, collectibles, clothing and headphones. Think Justin Bieber posters and Batman cookie jars.
HMV generates about 50 per cent of its sales from movies and 30 per cent from music. Sales of related items like clothing and collectibles, which currently make up about 20 per cent of sales, will rise to about 35 per cent of overall revenue in 2014 as movies and music sales drift lower, Mr. Williams expects.
