It’s tough being any kind of bricks-and-mortar music retailer these days. Sam the Record Man, A&A Records, Music World, Virgin, Tower, Camelot–they’re all gone. The only major music retailer still standing in Canada is HMV. And things aren’t looking so hot.
Here’s a quick explanation. HMV has an affiliated company called HUK 10, a relationship that’s become very intertwined over the last few years as HMV sought to remake itself from a place where people bought CDs to a store that sold all kinds of music merchandise, from CDs to t-shirts t0 mugs to earbuds. As far as I knew, that rebirth which began after a bad 2011 had been very successful–so successful that HMV UK (a separate entity) was employing HMV Canada’s best practices in their turnaround. But maybe not.
According to a report in today’s Globe and Mail, HMV owes HUK 10 $40 million (!!!) and was supposed to ask Ontario Superior Court today (January 27) to put the whole chain into receivership. That would mean the closure of some 100 stores coast-to-coast.
I quote from The Globe, which cites HUK 10 director Christopher Emmott: “[T]he debtor has been unable to reach an agreement with the major suppliers on mutually beneficial terms that would allow the debtor to address its immediate cash flow needs.” In fact, HUK 10 hasn’t seen any money since November 2014. Uh-oh.
According to the filed documents, HMV has been losing money since the end of 2013. Sales have dropped from $266 million to $193 million. Why? Blame streaming music for cutting into physical music sales. Blame Netflix and Apple TV for decimating DVD sales.
This isn’t good. I have many friends all through the HMV organization, all the way to the top. This isn’t good. Stay tuned.
UPDATE: An Ontario Superior Court of Justice approved the request to put HMV Canada into receivership. According to documents, HMV was losing $100,000 a day and would require between $2 million and $5 million annually to stay open.
The receivership deal says that the stores–102 of them–have to cease operations by April 30. HMV employs 1,340 people.
I spent thousands at HMV over the decades. One of the best days was when they introduced shopping baskets so nerds like me didn’t have to juggle armloads of CDs. I certainly made the most of their loyalty club (buy 10 CDs, get one free). And believe it or not, HMV had a return policy. If, for whatever reason, you didn’t want the CD you bought, you could take it back for a refund. No, I’m not kidding.
Goddammit. This isn’t good.
(Correction: My error. Sunrise is still in business, just not in Toronto’s downtown core.)