2013-01-17T17:25:00Z By Alex Lawson
2023-09-25T06:34:00Z By Megan Robinson
The big four grocers and Amazon are expected to be the biggest beneficiaries if collapsed entertainment retailer HMV were to shut all its stores and close down completely.
The news comes as HMV formally collapsed into administration last night, after filing an intent to appoint an administrator on Monday evening. Deloitte has been appointed administrator.
Several parties are thought to be circling the collapsed entertainment retailer, including HMV Canada owner Hilco and private equity firms Better Capital and Endless, giving hope that a future could be secured for the business.
However, should HMV leave the high street completely, supermarkets are expected to grab 32% of HMV’s market, according to data from Kantar Worldpanel.
Etail giant Amazon would mop up 29%, boosting its share of the market from 20.7% to 25.5%, thereby “making it the largest entertainment retailer by a significant distance”, according to Craig Armer, consumer analyst at Kantar Worldpanel.
Tesco would be number two in the market with a 14.1% share. At present it holds 11.8% of the market.
However, if HMV - which holds 17.5% of the market - were to close down completely, £300m of sales would be lost entirely from the entertainment sector, representing 9% of the market.
“Some shoppers will simply move to other retailers but the value generated from browsing and buying on impulse will be lost,” said Armer.
A full HMV closure would mean the high street would account for just 16% of entertainment spend, coming from the slimmed-down Game chain, which itself collapsed this time last year, Argos and Blockbuster.
“This would be a significant drop in share – this time last year high street retailers made up 31% of the entertainment market,” said Armer.
“Although Amazon is likely to gain the most, HMV shoppers prefer physical stores meaning that any bricks-and-mortar chains are likely to acquire slightly more of this lost spend than expected.”
A high street without HMV would mean the music market could decline by as much as 10%, the visual market by 12% and the games market by 4%.
As Deloitte was formerly appointed last night, its joint administrator and restructuring services partner Nick Edwards, said: “HMV is an iconic retailer and continues to be a very popular brand, but as we have seen with many high street retailers, the market is changing rapidly and conditions are currently very tough.
“Following our appointment, we are working closely with management and staff to stabilise the business in order to continue trading whilst actively seeking a purchaser for the business and assets. We appreciate the cooperation and support from the staff, customers, suppliers and landlords at what is clearly a difficult time.”