His master's void: profit gaps responsible for possible closures (Image: bm.iphone)
This manages to be even less surprising than the Blockbuster bankruptcy filing in the United States: according to The Daily Brew, HMV may be looking at closing some—or even all—of its Canadian stores. As sales of CDs and DVDs stumble, HMV’s search for other options hasn’t paid off:
The closures will likely be announced before an April test of its borrowing rules, which are expected to be tight. And, while the HMV Group will apparently seek to end its leases in shopping malls across Canada, an imminent exit altogether isn’t seen as likely.
HMV introduced a “store of the future” format three years ago, which was designed to make locations more browsing-friendly with an enhanced selection of books, electronics and video games. Computer hubs were also set up in some locations to encourage social networking, online research and on-the-spot downloading.
The problem for stores like HMV—and other music retailers—is that the music industry may be even more doomed than we already thought. The good people at Business Insider look at the last 30 years of data from the recording industry, and when the data is crunched, some troubling facts (and hilarious graphs) come out.
- When adjusted for inflation, the music industry is making less money than any time since the CD was introduced.
- When adjusted for inflation and population, revenues are lower than any time since 1973.
- People are spending about one-third as much on recorded music today as they did 10 years ago.
And there’s good reason to think all of these trends are going to get worse, not better. Basically, the music industry relies (or, perhaps, relied) on full-length album sales, and while iTunes has opened up some new money, it’s largely helped revive the single. The download hub hasn’t helped (and may have harmed) album sales.
HMV won’t be the first retailer to fold (remember Sam’s? Music World? A&A?), and with numbers like that, it probably won’t be the last.
• HMV considers closing Canadian stores this spring due to shrinking sales [Daily Brew]
• The REAL Death Of The Music Industry [Business Insider]
Read somewhere they are redesigning their stores. What will they be doing?
May 1, 2011 at 11:12 am | by Harvey landryThe begining of the end is when hmv Canada brought in a new president from the Sony stores, a guy who knows nothing about music and movie retailing. He then brought in a guy who helped run Sam the record man I to the ground as vice president of product. It has been a downward spiral ever since and now HMV are toast. And ironically the president pulled a dick tuck and ran off to a lesser position with Rogers. Why Rogers would being on a failure is beyond my comprehension….watch your back Rogers and ignore any recommendations “he” makes. A 5th grader has better business sense that he has. FAIL!!!!
May 14, 2011 at 4:43 pm | by CcSome good points here. I TRY to buy at my local (Fredericton) HMV but there’s not much to be had… Why? Staff say central buying based on stock replacement and someone in Toronto determining their stock is a serious problem. Why not let the staff have some say; they know what’s going on in the store. In the UK, HMV own some stores named FOPP. These are – by comparison – great. The one’s in Edinburgh and Glasgow tend to stock more diverse catalogue (read: more than the top 20) and are generally hip. I believe there is demand for CDs, but the lousy business model of HMV is strangling it’s future. I certainly hope they don’t die in Canada… but they did in the States. And in the UK they’re shutting a number of shops and have unloaded Waterstone’s the chain of bookstores acquired a few years back.
May 22, 2011 at 7:41 pm | by waynebWow I see alot of people here slaming hmv for no reason at all. As a former employee I know the ins and outs to the reasons why its like that and maybe for any other companies. They buy only for about 100 stores in Canada and you buy accordingly they don’t have really the luxury like Walmart, Future Shop or Best Buy to use it just for lost leader or arrange for better pricing because of their deeper pockets given the fact that the do sell other things than music and movies.
How do I know because I used to buy for a store and one of those new cd release like Lady Gaga (I know hate her too) sells for $12.99 and buy one for the store costs $11.98 given her record distributor is Universal Music if the previous negotiation for purchasing still holds. Yes they are a well known chain but they specialize in just Movies, Games, Music and related items.
Amazon is another example to with deeper pockets and they don’t have multiple stores pay rent, electricity, internet, phones, pay for shipping costs to the stores, renting POS systems and computers. They have a central Warehouse where they can keep their wares along with other items that have nothing to do Music, DVDs, Games and related items. Amazon may as well be using music and DVDs as loss leader too.
Before you guys slam them you have to think about the situation and the reasons.
One facet that I did like was the fact that if they didn’t have it they would order it in no shipping charges, no deposits and they would call me as soon as my item came in. The one thing you had to be was patient sometimes because as I learnt later on when I worked there is that there were sometimes minimum requirements that distributors needed before the would send the product to the store like Universal Music’s $500 purchase for the store before they would ship or other companies like Paradox Entertainment (This company would carry a lot of Anime for me) was minimum 10 items order before it would ship.
I worked there for about 6 years before I choose to leave because of the declining sales. I wouldn’t have but I have a family to think about and I left right on time because it has been a year.
Like a previous poster here has said I’m too a little worried for the Canadian Artists on smaller labels because they did have quite a few Canadian Artist in their Catalogue in the stores. Whats going to happen to them now.
June 5, 2011 at 1:14 am | by what are you talking about?hahaha everyone crying about losing minimum wage jobs at a big retail chain? Maybe this will open up better jobs as the online market continues to expand, and allow the musicians who actually create the music better margins on their sales?
June 27, 2011 at 6:51 pm | by MathieuWhen I saw a Justin Bieber Poster being displayed for sale Right beside the “Metal” section, I just told myself “it’s time to leave”
July 17, 2011 at 2:00 am | by JonAs a devoted HMV customer, over the years I have spoken to many employees at HMV and consider them to be nice and knowledgable. It would be a tragedy if they closed, becuase I only go there, otherwise I’m on i-tunes. As for all your haters, you need to get a personality check. These people work hard and you obviously don’t care if the stores close, but they will lose their jobs, so before you criticize maybe you should find a job first.
July 18, 2011 at 8:58 am | by carolineThis makes me sad! I love HMV. I still buy tons of CD’s and there are so many DVD’s I also want. Now I will have to order most of them online.
October 23, 2011 at 9:10 pm | by PersonPersonally, I am a big bargain shopper and only like to go into stores like Walmart, HMV, Future Shop, Best Buy and the soon to be gone Zellers to look at the bargain bin. (As well as some independent stores)and I have often walked out of HMV with one or two DVDs that I was excited to find. I only buy online if I have no choice or if it is a film I desperately want which is rare. With HMV gone, there goes another store that I frequent that I cannot bargain shop at anymore! I was so sad to also see Metro Video go under. Blockbuster though, I had no problems with. The management is terrible and employees were constantly threatened of being fired! I see that a lot of people think that the prices are high, and generally I do somewhat agree. But as a bargain shopper so only comes to look in the bargain bin, it is something that doesn’t bother me. As a matter of fact, I find often enough that the one store that I never find anything that I like for cheap is at Future Shop. I hope HMV improves and sticks around.
October 30, 2011 at 12:01 am | by Elise