While many retailers, particularly the fashion boys, have been knocked for six this year, Fox’s HMV has recorded surging like-for-likes.
Growth was spearheaded by the eponymous chain, but bookseller Waterstone’s has made great progress too and group profits for the year are likely to come in at the top end of expectations – that’s in the region of£58 million.
One year into his turnaround plan, things are looking good for Fox. When he took up the role, there were serious doubts about whether he could revive the then ailing business. Internet competition and the grocers’ growing entertainment operations looked like a death warrant for HMV.
But on his showing so far, Fox has proved there is still a place for entertainment specialists on then high street.
Of course it’s still early days. It will take another two years to implement the revival strategy fully, and it’s arguably easier to make improvements at a business when starting from a low base.
Despite City delight at today’s numbers, the enthusiasm is tempered by ongoing doubts. There have been complaints that earnings will grow by “only” 20 per cent and debate about whether this strong like-for-like growth is as good as it gets.
That’s pretty curmudgeonly. Fox has surprised so far. Why should he not do so again? All good magicians know that the show shouldn’t peak a third of the way through.
Fox’s most spectacular wizardry may be yet to come.
More problems for Browett
The lights will have been burning late in Hemel Hempstead last night as DSGi boss John Browett digested the implications of Carphone Warehouse’s tie-up with Best Buy.
With less than a week to go before unveiling his turnaround strategy for DSGi, Browett will have to revise his plans.
As we report in this week’s issue, providing added value rather traditional low prices is probably where DSGi’s future lies. That is one field in which Best buy and Carphone excel, so the pressure will be on Browett to really get DSGi motoring before the first Best Buy stores open in Europe next year.
What might have been a differentiator for DSGi will now have to be desperately fought over with one of the best retailers in the world.
Next week was always going to be a red-letter day for DSGi. Now Browett’s vision will be more eagerly anticipated and more fiercely scrutinised than ever.