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Charting the Fall of a Legend: HMV Enters Administration

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Lamine Lahouasnia Bio


Once upon a time, there was a retailer named HMV and it sold CDs, video games and even DVDs. It was regarded as the most prized high street centrepiece for teenagers in all of the land and people came from lands afar to spend hours in its stores. Whether discovering new music or playing the latest shoot ‘em up, HMV provided entertainment for all. In winter, its coffers bulged from people emptying their wallets to purchase boxed sets of Dr Who and Glee. Then came the internet with its mystical gifts of MP3s and movie downloads. No longer did the people have to brave the bitter cold winds of winter or the never ending rains of spring to listen to new music or play new games. Soon, HMV was no longer the meeting spot for teenagers on a Saturday nor the ‘go to’ shop for quick Christmas gifts. Its stores, unvisited and out-dated, fell into disrepair and became relics of days gone by. The ascension of the smartphone as king of consumer devices, wielding its dual weapons of Spotify and Pandora heralded the beginning of the end for HMV.

No Country for Old Men: HMV Underperforms in Western Europe

HMV Underperforms in Western Europe

Source: Euromonitor International

A little less conversation, a little more action

HMV’s fundamental problems all stemmed from its inability to efficiently move with the times. It was dedicated to DVDs in the age of Netflix and eager to maintain a massive store portfolio in the era of internet retailing. With regards to technology, competitor Amazon was able to build a mobile site and develop an MP3 app in preparation for the advent of the smartphone. HMV, on the other hand was able to achieve neither. With regards to investments, Amazon put £200 million into the future of the film market by acquiring LoveFilm in 2011. HMV, on the other hand, used its funds to acquire the failed Fopp and Zavvi store brands. Whilst it is somewhat easy to list HMV’s poor strategic decisions with hindsight, the fundamental shift in the UK retailing market has caused many other retailers in similar industries to falter. Euromonitor International even wrote a global briefing dedicated to the incoming technological challenges facing retailers in developed markets back in 2010.

R.I.P to the stores I used to see

HMV’s descent into darkness is unfortunately a tale which is all too familiar. Game Group capitulated around this time in 2012 under eerily similar circumstances. Once the bastion of video gaming, Game Group struggled to shift its business to a more profitable online platform. Electrical retailers, Comet and Jessops, have also had to call in the administrators recently and there are signs that many other retailers face similar fates. PPR recently spun off media store, FNAC , in an attempt to sell the French brand whilst it still has some value.

Internet retailing is the major cause of these casualties, but strong Christmas results from retailers Phones 4 U, John Lewis and QD Stores prove that store-based retailing is far from dead. Solid performances from UK grocery retailers also confirm this theory, with the  exception of Morrisons, a retailer which has yet to fully embrace internet retailing. All signs point to the Darwinian business concept of ‘innovate or die’ and in the case of HMV, it was a case of too little, too late.


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