HMV Financial Problems

January 22, 2013 by  

HMV Financial Problems, TS-EX-RE were warnings before Christmas that as many as 140 retailers were in danger of collapse this year, but few expected such an avalanche before the first month was out.

HMV’s demise so soon after Comet and Jessops is now affecting the wider economy. The property sector is worrying that a flood of vacant shop premises will have an impact on values and rents. As for job prospects, retail is a big employer and the biggest in Scotland. In particular, women and young people will be deeply affected.

There is some respite in today’s figures from the Scottish Retail Consortium which show a small year-on-year rise, but inflation more than takes account of the uplift in sales.

There are still big successes – department store groups John Lewis and Debenhams remain in good health – but the casualties are mounting and the high street will be a different place as a result.

One common thread to those collapsing firms is a failure to adapt to changing shopping trends. JJB Sports had too many stores and the wrong stock. HMV has been described as out-priced and out-dated; too slow to adapt to the download and streaming revolution and to online trading. The company, a fixture in the music business since 1921, has a 23 per cent market share compared with Amazon’s 22.4 per cent and iTunes’ 18 per cent.

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