HMV, the music and electronic store today announced half-year losses of £45.7million putting significant doubts on its ability to continue. In a last ditch bid, Simon Fox, chief executive of HMV has decided to sell HMV Live (their live music business) in an attempt to reduce their borrowings. This is all despite ‘Live’ being the only profitable strand of the HMV group during the March to October period, only going to highlight the dire situation that HMV is facing.
HMV has already closed 34 stores and many project the 258 store network to diminish even further. This will come as further bad news to the firm since it recently refitted over 100 of its stores in an expensive attempt to stabilise the rapid financial decline it is currently experiencing.
The main reason this is happening is of course the internet which has enabled smaller firms to take their place at the table and bigger companies such as Tesco to monopolise the market and undercut HMV’s prices. The other reason is the recession. People now have less to spend and due to what HMV sells (cds and movies) being luxury goods which means they are not essential, there is far less demand for the companies goods.
But, what impact will this have on you? If you receive a gift voucher for HMV for Christmas then you had better use it quickly seeing as it looks unlikely that they are going to be around for long. Whilst, the closure of HMV in 2012 would surely lead to a domino effect in which no retailer in the high street would be immune from facing the same fate.
No comments:
Post a Comment