Uh-Oh. Are We About to Lose HMV? – UPDATE: Looks Like It.
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.)
Noooooo… I have gift cards to use…
we were told we would be closing our store in 8 weeks….
I understand that all stores have to cease operations by April 30.
Dammit dammit dammit.
Completely predictable. As far as selling music- totally f’d it up. My local HMV is hopeless. They don’t get new releases on the release date, nobody working there knows anything about the music section, even if they have stock (according to their website, a valuable feature they canned last spring some time) they don’t know where it is, they are poorly informed on the music scene. It’s a disaster.
I know nothing about marketing but I know this about record stores- staff need to have music knowledge beyond the top 30 (it would help if they even knew the top 30).
The music section shrinks by 1/2 a rack every time I go in. They have 5 copies of something on a rack somewhere but the artist card is empty in the bins.
The rack of vinyl is the same rack they use for CDs. The vinyl doesn’t even fit properly on the rack, it’s usually falling forward at a bendy angle.
They play a corporate tape of hits- I can hear those songs just by opening my window every day.
Major world/national music events and area concerts- no promotion, no display of the artists.
Polaris- no display or rack, don’t even stock a bunch of the nominees.
Junos, AMA, Grammys- no display.
Biggest Gigantic Music Festival of the Year in their back yard- no display of artists and no stock of many in the lineup.
When half the rack of Cds have 3/$15 stickers on them, and the new release CDs I’m interested in have a $21.99 sticker- really bad optics, and hardly promoting new artists and new releases.
As for record companies and retail chains together- I should be able to get the digital download of the physical music item I am buying- in store (on their stream/wi-fi), included in the purchase.
I should be able to point my smartphone at any cd/album cover (whether thru an app or qr code or whatever) in the store and be able to sample songs or get info on the album, artist and their catalogue. My smartphone should be way more connected to the store experience than just trying to figure out if they have something in stock or pulling up the album pick hoping one of the staff might recognize it..
Ten years ago the photo industry was hit with digital photo- they went to print on demand, print from media, self serve kiosks. Why the record companies didn’t do this is beyond me. Apple and other companies did it with books. Why couldn’t I go into a record store and buy a physical copy of any cd in a catalogue, printed on site with booklet, liner notes, and cd- ? Ten years ago the record companies broke the link between physical media and the listening experience.
This is not about people not going to stores, it’s about the record industry not giving people a reason to go to stores.
So, you think that a new CD should be 3/$15?
No wonder this is anonymous, nobody would say something that dumb and put their name to it.
No, I did not say new Cds should be $5.
If I own a shoe store and I’ve built my rep on selling the latest fashions and quality shoes, and even custom limited edition shoes, and suddenly I move all my new and high fashion shoes to the back of the store and fill the front with novelty sunglasses and straw hats and character licensed shoehorns, and shoe keychains and flipflops … and then I bring in a container of 70’s platforms and earth shoes and crowd what’s left of my fashion table with those 3/$15 gems – I think I have a few merchandising problems, I’ve lost my focus and I’m probably not really a shoe store anymore- I’m just moving stuff, and wondering why my fashion brands aren’t selling.
HMV gave up on music before Spotify and Apple Music showed up. They tried a digital marketplace. For years I’ve heard the questions of ‘how long can they keep pushing cheap Greatest Hits discs’? They have not been cultivating/fostering a music customer or a music base.
This is more than ‘streaming wrecked my business’.
Alan!!! You said the store was doing well! I can’t believe this shit is happening! What am I going to do now!!!
(Falls on knees and pounds the ground, sobbing ala Planet of The Apes.)
I love my independent records stores but I can’t shop there all the time. They overcharge a lot. Tried to sell me No Code by Pearl Jam for $50 when it was $40 at HMV. A single disc vinyl record should even be $40 bucks. Are they trying the kill vinyls resurgence too?
So what’s left in Toronto to buy CDs? Soundscapes, mikes music. I guess I’ll have to buy online. Really not the same.
Damn this really sucks. This officially ends that wonderful strip of record stores on Yonge st. Hmv was the last one standing
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