HMV has opened a 25,000 sq ft shop called HMV Vault in the midlands city, which it claims will be a “nirvana for music and film fans”. The store will sell vinyl, CDs and DVDs and offer a live performance area. The brand used to be the go-to place for music or film requests, but since the rise of the digital era and streaming services, the chain has gradually become less successful. Canadian businessman Doug Putman took over HMV UK in February this year, saving it from administration and rescuing 100 stores from closure and 1,600 staff from unemployment. He also acquired HMV Canada two years ago and merged it with the record store chain Sunrise Records.
Even though Mr Putman closed the chain’s flagship branch in Oxford Circus and 26 others when he bought the company, it still claims it is the “UK’s largest entertainment retailer”.
Fans have hoped since his takeover that the brand may return to its former glory days.
Yet this is not the first time HMV has struggled with financial difficulty. The company has called in the administrators twice over the last decade.
Mr Putman now wants to “simplify the offer” for HMV’s customers, by opening what it claims is Europe’s biggest entertainment store which “reflects the resurgence of the HMV brand”. He also wants to combine “clicks and mortar” to honour the brand’s 100 years on the high street, which they will celebrate in 2021.
Doug Putman bought the chain in February 2019
Mr Putman has opened a new store in Birmingham called HMV Vault
However, critics believe it may be difficult to resurrect HMV again.
In a BBC article published in February 2019, when Mr Putman had just taken over the firm, retail analyst Richard Hyman said: “Has this Canadian chap got a magic wand? I think it’s going to be very difficult to carve a viable business.
“I think it’s great that jobs have been reprieved, but I wouldn’t be very confident about the length of time that may last.”
Mr Hyman claimed one main issue with HMV is the absence of a “unique product”. The article explains “performers aren’t going to record for just one retail outlet”, whereas fashion and food retails can develop an exclusivity with their products and cultivate a recognised name and label.
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The new store opened in Birmingham
Mr Hyman continued: “When you want to buy a Charlotte Bronte novel, a Shostakovich piece or Cinema Paradiso they are going to be the same wherever you buy them from.
“If you’re selling something which is unique you’ve got something to defend there.”
HMV has been fighting against online giants such as Amazon which often offer the same products, readily ordered straight to the customer’s front door.
The retail analyst also explained that “the economic model of retailing is under unprecedented challenge”.
He said: “In order to make money you have to add value – adding value to a product that is made by somebody else is really difficult because where can you differentiate yourself?
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Liam Payne performed during its opening night
The new shop offers vinyl collections
“With HMV it’s easy to say they should have been bigger online much sooner, but would they actually have been able to win a war with Amazon? I don’t think so.”
The widely held belief is that HMV failed due to the boom of the digital age, and the article referred to the “challenge” HMV have to make to switch to digital streaming – especially when Amazon, Spotify and Apple are already established streaming services.
In the same article, music industry analyst Mark Mulligan argued that the younger generation stream music instead – and he pointed out the rate of decline is accelerating.
He added that HMV did not know as much as its rivals about its customers because “the relationship starts and ends at the cash till”.
The flagship store in Oxford Circus closed in February
Mr Hyman also said that the boom of music available online has affected the high street.
He said: “There are some markets that are just so compatible with online retailing that it makes it very difficult to have economically viable retail stores.
“The overwhelming problem is they’re not generating enough sales revenue. It’s not about onerous costs. Those are very common words to be bandied about by management teams. But onerous leases weren’t onerous when they signed up to then – otherwise, why did they sign?”
Yet, HMV supporters have their fingers crossed that this new store will offer a sense of nostalgia not available through streaming services.
Vinyl sales rocketed to a 25-year high recently, and the store’s opening has also been timed to coincide with National Album Day.