Making sense of the past seven days
Can he pull it off? Well, Simon Fox won’t be breaking open the champagne yet, but HMV’s trading statement yesterday was a rare bright spot in the miserable recent history of the entertainment retailer.
Plenty of retailers have spent the summer bemoaning the awful weather conditions, but Fox won’t have been one of them. The constant rain might have been bad for barbeques and flip flops, but it was great for sales of games consoles and DVDs. Sure, it was lucky for HMV, but all retailers get some luck from time to time and HMV was in the right place at the right time, just as some of its competitors were falling by the wayside.
The UK and Ireland like-for-like sales growth of 9.6 per cent was aided not just by weak comparables and bad weather, but also by record buyers who might previously have gone to the collapsed Fopp spending their money in HMV.
One swallow doesn’t make a summer, though, and much is riding on whether Fox can get both the stores and the digital offering in the right shape. This week, the company opened its stores of the future in Dudley and Tunbridge Wells and whether this blueprint can create an environment where music lovers really want to spend time and hang out will be crucial to the retailer’s success.
The strategy is exactly right and, while cynics may sneer at ideas like an HMV social networking site, retailers in the entertainment sphere really need to be up with the changing tastes of today’s younger shoppers.
The question is, whether it will be enough to stem the structural changes in the sector. Entertainment retailing is changing at an alarming pace, but this summer has shown that demand does still exist and people do still want to shop for entertainment products. And that means that, while there will be fewer music and DVD shops on the high street in years to come, HMV will still be leader of the pack.