HMV- Not a real shocker, but a good read.

[MiltyG565]

So i came across this blog post from a man who ran a marketing company that dealt with HMV for 25 years. Here's the link- http://www.philipbeeching.com/2012/08/why-companies-fail-rise-and-fall-of-hmv.html?m=1

Make of that what you will.

I do think of HMV with a fondness, and probably even romanticise the experience of shopping there to and extent. But as the blog says, by the time they had twigged on to where they were loosing out, it was too late, and everything they were doing was an exercise in futility. It's sad really. It's an important lesson, that you can never underestimate technology, because it develops at such a rate that it will just pass you by if you aren't watching it. unfortunately, the MD at the turn of the digital revolution buried his head in the sand, and that was the beginning of the end for the music, games and video retailing giant.

Sad times. What do you guys think? What are your memories- good and bad? I just thought after being such a big player in the market, a little post to them was the least they deserved.

[urb]

I worked in the (once) large HMV in Oxford for two years and was the buyer for the 'specialities' section which had a huge jazz range alongside country, folk, world, soundtracks and other stuff - but then I had a chance to work for a music dotcom in 1999 and went for an interview and got the job. I told one of the (arrogant) regional manager's who would swan around the shop once a month (swaggering about like he was a frigging rock star) that I'd got a job on a music website and his immediate response, with a sneering laugh was; "what the internet? that's rubbish..."

Well this seems to tallying exactly with the views of the MD as per the above article:

[i]"The three greatest threats to HMV are, online retailers, downloadable music and supermarkets discounting loss leader product". [/i]

[i]Suddenly I realised the MD had stopped the meeting and was visibly angry:

"I have never heard such rubbish", he said, "I accept that supermarkets are a thorn in our side but not for the serious music, games or film buyer and as for the other two, I don't ever see them being a real threat, downloadable music is just a fad and people will always want the atmosphere and experience of a music store rather than online shopping."[/i]

It is sad but their business model and their arrogance (like all old school record labels who had it good for so long) they got complacent and then failed to act quick enough when the tide turned against them - the music industry and music fans have changed forever now and while I love going to a good record shop but increasingly artists/bands are getting really good at selling merchandise directly to fans at gigs and that really is the way it's going. If you want to actually buy music (which I still do quite a lot actually) then there's no excuse - it's all there at your finger tips.

[Skol303]

I think they had it coming long before the recession - a failure to change with the times, like so many dinosaurs of the music biz.

[i]But...[/i] that's not to say I won't miss HMV. I was more of an Our Price Records kid in my youth, but I graduated to HMV afterwards and continued buying vinyl from them from time to time. I've heard on the grapevine that they might be seeking a bail out from within the industry, as certain major labels are keen for them to keep trading in order to give their artists/products a more visible presence on the high street. We'll see. Personally, I wouldn't count any chickens and get spending those Christmas vouchers if you were (un)lucky enough to get any this year!

Edited January 15, 2013 by Skol303

[Big_Stu]

[quote name='urb' timestamp='1358244953' post='1935295'][i]"The three greatest threats to HMV are, online retailers, downloadable music and supermarkets discounting loss leader product". [/i][/quote]

It's 100% this; I had two stints at working in the studio of the printer who did CD & DVD covers for almost all of the biggest companies. The first time I was there the runs were large (ie., high quantities compared to now) & all of the names were the big names. 2nd time around (up until early last year) the runs were much less due to downloads & general drop in sales & I saw on a weekly basis covers I had seen being made, in supermarkets that would have cost more to print than the price being charged.
It didn't help that the disc manufacture was moved to Europe, from literally across the road from where the covers were made, while the covers were still being done here, marrying the two together would logistically impossible to make money on.
The shop does make the biggest wedge out of the price of a disc, followed by royalties (IIRC). The supermarkets can use them as a loss-leader, HMV couldn't - especially if they had to charge competitively with what supermarkets were charging; which is why they went into extras, T-shirts, headphones etc but it didn't turn them around enough.

[MiltyG565]

[quote name='Skol303' timestamp='1358245108' post='1935296']
Personally, I wouldn't count any chickens and get spending those Christmas vouchers if you were (un)lucky enough to get any this year!
[/quote]

BBC reported that they have stopped honouring their vouchers. If you have any, get down there right away, and see if you can get them used up.

[MiltyG565]

Can somebody explain to me please what a loss leader is?

[Big_Stu]

[quote name='MiltyG565' timestamp='1358249703' post='1935407']
Can somebody explain to me please what a loss leader is?
[/quote]

Something a shop sells at a loss or break-even hoping/expecting that once the customer is in the shop they'll stick around and buy other stuff at prices that do make profit. Supermarkets are very good at it, especially if they're over-stocked on a particular item.

[oggiesnr]

[quote name='MiltyG565' timestamp='1358249703' post='1935407']
Can somebody explain to me please what a loss leader is?
[/quote]

It's where they sell a product at a loss to get people into the supermarket in the expectation that whilst they're there to buy that product they will buy other stuff as well and the supermarket will make an overall profit on the deal.

Steve

Cross posted with the above.

PS it's also often the case that the loss is not being made by the supermarket but the supermarket has twisted a supplier's arm to supply at below cost price, usually by holding out the promise of more trade (or under the threat of not renewing a contract if they don't play ball).

Edited January 15, 2013 by oggiesnr

[MiltyG565]

[quote name='Big_Stu' timestamp='1358249876' post='1935413']
Something a shop sells at a loss or break-even hoping/expecting that once the customer is in the shop they'll stick around and buy other stuff at prices that do make profit. Supermarkets are very good at it, especially if they're over-stocked on a particular item.
[/quote]

I thought that was it. I would be incredibly difficult for HMV to do that, indeed.

[Big_Stu]

[quote name='oggiesnr' timestamp='1358250127' post='1935423']PS it's also often the case that the loss is not being made by the supermarket but the supermarket has twisted a supplier's arm to supply at below cost price, usually by holding out the promise of more trade (or under the threat of not renewing a contract if they don't play ball).
[/quote]

I know a guy who had that done to him by a high st supermarket who lost everything due to it, business, house, marriage the lot. They held off payment for so long that he went under!

[MiltyG565]

[quote name='Big_Stu' timestamp='1358250906' post='1935447']
I know a guy who had that done to him by a high st supermarket who lost everything due to it, business, house, marriage the lot. They held off payment for so long that he went under!
[/quote]

Aye, C U next tuesday's is the appropriate term.

It's ruthless, and i would be looking for the good order first, then letting them have the really cheap stuff after that, and a contract to supply.

[Big_Stu]

[quote name='MiltyG565' timestamp='1358251669' post='1935470']
Aye, C U next tuesday's is the appropriate term.

It's ruthless, and i would be looking for the good order first, then letting them have the really cheap stuff after that, and a contract to supply.
[/quote]

Contracts won't matter to them, this guy had one. Independent supplier in court against a horde of QCs that he'd be up against. It'd be farting against thunder.

[MiltyG565]

[quote name='Big_Stu' timestamp='1358251944' post='1935486']
Contracts won't matter to them, this guy had one. Independent supplier in court against a horde of QCs that he'd be up against. It'd be farting against thunder.
[/quote]

What are QC's?

[Big_Stu]

Top flight lawyers.

[jezzaboy]

[quote name='MiltyG565' timestamp='1358252028' post='1935490']
What are QC's?
[/quote]

Queens Counsel. Very highly paid, heavy duty lawyer dudes I think?

[MiltyG565]

[quote name='Big_Stu' timestamp='1358252225' post='1935500']
Top flight lawyers.
[/quote]

Yes, but if you have a contract, how can they argue that it isn't valid?

[flyfisher]

It's all very well to blame the MD for being a useless dinosaur, but what about the rest of the board? What about all the non-executive directors wheo are supposed to help steer the business strategy? Sorry, it's too easy to lay all the blame on one guy.

Another view here that some good might come out of HMVs collapse:
http://www.bbc.co.uk/news/business-21023602

[Big_Stu]

[quote name='MiltyG565' timestamp='1358252751' post='1935525']
Yes, but if you have a contract, how can they argue that it isn't valid?
[/quote]

They don't, they just stall for time before it goes to court, then have legal hitch after legal hitch causing postponements.
All that time the small guy's bank is racking up the charges on the loans, overdrafts etc. until they won't wait for payments any longer or get worried they'll ever be repaid & pull the plug. Job done.

[MiltyG565]

[quote name='flyfisher' timestamp='1358252790' post='1935529']
It's all very well to blame the MD for being a useless dinosaur, but what about the rest of the board? What about all the non-executive directors wheo are supposed to help steer the business strategy? Sorry, it's too easy to lay all the blame on one guy.

Another view here that some good might come out of HMVs collapse:
[url="http://www.bbc.co.uk/news/business-21023602"]http://www.bbc.co.uk...siness-21023602[/url]
[/quote]

Ah, that's interesting. Not sure i understand it 100%, but oh well, i understand it mostly.

[MiltyG565]

[quote name='Big_Stu' timestamp='1358252980' post='1935543']
They don't, they just stall for time before it goes to court, then have legal hitch after legal hitch causing postponements.
All that time the small guy's bank is racking up the charges on the loans, overdrafts etc. until they won't wait for payments any longer or get worried they'll ever be repaid & pull the plug. Job done.
[/quote]

That makes me so angry! how can you be so ruthless to the people that supply you? should i go and make my mother leave the house? Bloody ruthless, heartless dickheads.

[Conan]

[quote name='MiltyG565' timestamp='1358253640' post='1935568']
That makes me so angry! Bloody ruthless, heartless dickheads.
[/quote]

Every little helps...

[kerley]

[quote name='flyfisher' timestamp='1358252790' post='1935529']
It's all very well to blame the MD for being a useless dinosaur, but what about the rest of the board? What about all the non-executive directors wheo are supposed to help steer the business strategy? Sorry, it's too easy to lay all the blame on one guy.

[/quote]

He is the person who is ultimately accountable. He signs off on major strategy, he leads etc,. If the non-exec directors are not putting in place the best strategies it is up to him to know that and change them (the people or the strategies)

If it is anybodies fault it is his.

[fumps]

My personal opinion of the demise of HMV is sadness for the staff but but the brand & business.

There are three main music stores in Leeds HMV, Crash records & Jumbo records.
I used to love visiting Crash & Jumbo, talking to the staff, listening to music,finding new stuff & getting the odd cuppa offered during quiet days, they sold gig tickets as well.
I remember the time when I first went into the HMV mega store & it was stunning, I remember standing there just gob smacked at how big that place was......then after spending 10 mins in there I just didn't get it. It felt soulless a bit too big and no I didn't like it at all. so I never shopped there unless I really had no other choice.

Now the company is now gone & I look back at Leeds city centre two main shops remain Jumbo & Crash ......maybe there is legs in the old business/service you get from the old style of shops.

Maybe the larger companies are collapsing like the castles of old, larger more overheads more to go wrong.

It is a shame but like the OP says not a surprise

[richardjmorgan]

I think Fumps hit on something pretty astute. HMV couldn't compete with the likes of online retailers (both in terms of physical stuff and downloads) and supermarkets on price, and couldn't compete with the smaller indie shops on actual personality and interaction with customers, leaving it somewhat at sea in the middle. Still must be bogus for anyone at risk of their job going down the pan though.

Edited January 15, 2013 by richardjmorgan

[Mykesbass]

I went right off HMV years ago when it was reported that they made more money through their marketing department charging record labels to stock their records through in store displays etc than they made by selling records. At that point they stopped "selling" records and just stocked them letting the labels do the selling. One of the worst examples was the way they sold advertising space in Q, Mojo etc, charging more than we could have bought the same ad for on the promise of stocking the album. To add insult to injury they wouldn't place the order (which you had paid to advertise) until last minute and sometimes the order would be pitiful, leaving you paying something like a fiver per record shipped!