Music Magpie founder and chief executive Steve Oliver believes the business is well suited to weather the current economic storm.
The retailer recorded a slight decline in profits and sales for the first half of its financial year, against strong comparables during the pandemic, but Oliver said the business is “recession-resistant”.
Oliver told Retail Week the business was born in the recession in 2007 and is therefore designed to survive the impending crisis.
“We are a great way for consumers to raise cash,” he said, “whether that be by selling their old physical media products or old consumer tech products. We’re also a great way to save money, both by buying refurbished [products] and saving money and getting the same warranty, but also now by renting products from us.
“I do think we are a consumer champion; I do think we are definitely recession-resistant. We call ourselves counter-cyclical because we do help consumers counter cost of living crises.”
Music Magpie registered a loss before tax of £0.7m for the six months to May 31, down from a profit of £4m in the same period last year.
Revenues fell 2% year-on-year to £71.3m, which the retailer attributed to a drop in revenues from disc media and books, which fell 23.6% to £25.3m.
Music Magpie said this was expected due to the uptick in revenues during the pandemic.
Consumer technology revenues grew 15.9%, including subscriptions, which the retailer is focusing on more – it has secured a three-year £30m revolving credit facility with HSBC UK and NatWest to drive rental growth.
Oliver told Retail Week he has “great ambitions” for the rental subscription model.
He said: “It’s a great differentiator for the business from other consumer-facing online tech businesses, and it’s making really good refurbished devices very accessible to consumers.
“Our new bank facility will really support this, because the one thing about the subscription model and the rental offer is you don’t get that day-one sale, that day-one hit of cash, revenue and a bit of EBITDA, but it’s very recurring in its nature. So to now have the finance in place to really be able to put our foot down on the rental offer is really good for us.”
Music Magpie is also focusing on its rental offer for businesses by offering them the opportunity to act with sustainability in mind while also saving money by returning their disused company tech and renting new devices.
The retailer has targeted growth with third-party marketplaces including eBay, Amazon and Back Market while growing its brand recognition in the US market.
Music Magpie is in the midst of rolling out kiosks to 295 Asda stores in the UK, where customers can receive an instant valuation of their old products.
Oliver said he hopes to bring the kiosks to the US, placing them in mobile networks’ shops or other high-footfall locations such as supermarkets.