HMV may have to close up to 10 stores by the end of the month if plans to negotiate cheaper rents fall through.
The retail chain, which went into administration over Christmas 2018 until it was rescued by Doug Putman’s Sunrise Records, will need to shut up shop in some locations if renegotiations fail.
There are plans, however, as reported by MailOnline, to build new sites and carry out refurbishments in the wake of the company’s lauded reboot, which has placed renewed focus on vinyls.
A spokesperson for HMV confirmed to the publication that three stores shut over the Christmas and new year period.
“To date, hmv can confirm that three stores will be closing at the end of January as new tenants are moving into these properties. These are hmv Bury St Edmund’s, Fopp Glasgow Byres Rd and hmv Nuneaton. We are also relocating hmv in Lincoln and Plymouth with brand new stores opening in the cities at the beginning of February,” the statement confirmed.
“There are currently 10 stores where negotiations with landlords are ongoing and we are hopeful of securing new deals. These stores are due to close later this month unless new deals can be agreed.
“The closures are no reflection on our superb staff and where we are not able to come to a new agreement or relocate staff within the business elsewhere unfortunately this does mean some of our staff will lose their jobs. Landlords are working hard with us to try to come to agreements, however in some cases the extortionate business rates just mean that certain locations are no longer viable.”
They added: “At present, there are negotiations with landlords over our locations in Birmingham Bullring (this does not impact The hmv Vault opened in Birmingham in October), Leeds Headrow (we opened a new store in St John’s Centre), Bristol Cribbs, Edinburgh Ocean Terminal, Glasgow Braehead, Grimsby, Merryhill, Reading, Sheffield Meadowhall and Worcester.”
MusicWeek has salso poken to the music industry’s leading commercial executives to ask if the retail chain has a promising future ahead.
“The issue with the previous owners was that there were too many unprofitable stores sucking cash out of the business when other outlets were profitable,” David Hawkes, MD of Universal Music UK’s Commercial Division, said. “We would encourage HMV to run a profitable business. If there are stores out there that drag down profitability and could suck cash out of the business, we would proactively encourage them to close those unprofitable stores down.
Is it a worry? No, because I would hope that there is a decent proportion of stores out there that HMV are currently active with that can deliver ongoing profitability for them. Which is good for them and very good for the industry as a whole.”
Peter Breeden, COO and CFO of Warner Music UK, said HMV’s like-for-like store sales out-performed the market year-on-year.
“The way that Doug has repositioned the business more towards vinyl has definitely helped them because their vinyl sales have actually grown year-on-year,” he told Music Week. “There’s clearly still a space for physical and that’s very healthy for us as a business, because you need that revenue mix.”