While some HMV staff have been understandably shocked by the company’s administration, many will acknowledge that it has seemed inevitable. There remains a genuine belief that the company could and hopefully will survive.
While HMV staff have been understandably shocked by the news, many will acknowledge that it has seemed inevitable given its recent troubles. However, there was a genuine belief that the company could, and hopefully will, survive.
HMV has a very interesting staff culture and one celebrated strength of most of its employees is resilience. The vast majority of staff joined the business out of a passion for music, Game and film; as a result there is a strong emotional bond between staff, customers and the artists. You only need to see the depth of emotional reaction to the news on social media sites to understand this.
If a buyer is found for all or part of the business, it is likely that the workforce will remain fiercely loyal to the brand. Trevor Moore however, will face a significant challenge in convincing his people that he is the right man to lead the turnaround.
Recent decisions such as asking staff to cover up of tattoos may have damaged the relationship between frontline staff and senior management. HMV has a strong track record in supporting diversity in the workplace and this was seen as a direct attack. It is a tough working culture and the business has survived in no small part due to the sheer energy and enthusiasm of its people.
HMV’s operational model is based on a large number of SKUs, high unit turnover and credible customer service. Given the pressures on margin and as a result payroll, the model has become unsustainable.
Many commentators have identified structural failures in the market and the decline in physical product sales as the biggest contributor of HMV’s profit collapse. Additionally, and contrary to popular belief, price deflation in their core product has seen average prices of CDs drop by as much as 50% since 2002, while other consumer goods have doubled in price.
Whether HMV is reborn in some incarnation or the whole chain disappears from the high street, employment-wise it will be a difficult time for many of the staff. Between Comet and Jessops, close to 8,000 retailers at a variety of levels have come into the market, and HMV would add an additional 4,500 people to this pool. This flood of applicants will unfortunately add to what is already a fiercely competitive market out there.
Should HMV staff find themselves made redundant they will face a mixed reaction in the employment market depending on their skills and experience however, former HMV executives at Carphone Warehouse, Apple and several other retailers will clearly be keen to recruit from a strong pool of talent.
However, with little job creation, it is going to be challenging for individuals to secure a role. For some of the support staff it may prove a little easier to move to other sectors within retail or indeed to other consumer environments. For those working in and running stores, these individuals have a wealth of experience in music retailing and it is incredibly sad to think that this will be lost and not utilised.
- Jeremy Ellerd-Styles is senior partner at AdMore Recruitment and a former HMV employee