That HMV has succeeded in renegotiating its debts and selling Waterstone’s is good news.
That HMV has succeeded in renegotiating its debts and selling Waterstone’s is good news. It buys the business two years in which to reinvent itself, and give HMV a new reason to exist. But while it has taken a lot of hard work to get to this stage, for chief executive Simon Fox, this is only the beginning.
The £220m loan package buys time, but also heaps pressure on Fox because the terms of loans are potentially punitive if things don’t go to plan. And while HMV remains a profitable business, sales are in freefall.
Fox has worked valiantly to come up with new ideas to reinvent HMV. Some - notably the Live business - have worked. Others - selling fashion, and the cinema chain - seem to have been quietly ditched. He can’t be faulted for effort when it comes to the physical business, although it’s now clear the company was too slow to identify what HMV’s role would be in the digital revolution.
The big idea now is to turn the stores into technology shops. Apparently the trial stores have done well, and more are going to be converted to the new format before Christmas. The aim is not to take on Currys or Argos by selling TVs or fridges, but to focus on higher-margin electronics such as speaker docks and headphones with a clear link to HMV’s entertainment heritage.
But selling more headphones won’t be enough on its own, and there are no easy answers. There needs to be a ruthless purge of the store base because HMV still has too many shops. 100 or so stores creating buzzing entertainment and technology hubs in key centres, alongside a great digital presence, would represent the best hope. But the scale of what lies ahead of Fox is frightening, and demands the turnaround of all turnarounds.
The UK’s Jeff Bezos?
Calling Asos boss Nick Robertson “the UK’s Jeff Bezos” might have been considered hyperbole not so long ago, but it’s increasingly clear that Asos is emerging as the world leader in online fashion retail. Retail Week is all about highlighting best practice, and this week we’ve had a go at highlighting 10 key reasons for its success.
While Asos may be the poster child of UK etailing, the UK is a hotbed of online innovation. The web levels the playing field between established retailers and upstarts. That’s why its great news the more wacky proposals in the European consumer rights directive have been ditched.