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"HMV" redirects here. For the trademark and record label, see His Master's Voice. For The military vehicle, see Humvee.
HMV Group PLC
Company typePublic
LSE: HMV
IndustryRetail
FoundedLondon, England (20 July 1921 (1921-07-20))[1]
Headquarters
Maidenhead, Berkshire
,
United Kingdom
Number of locations
273 stores in 8 countries (2011)[2]
Area served
UK, Singapore and Hong Kong
Key people
Philip Rowley (Chairman)
Trevor Moore (CEO)
ProductsBooks
Video games
Film
Games
Magazines
Music
Fashion
Technology
Merchandise
Cinema
Live Venues
Ticketing
Artist management
Revenue£1,956.7 million (2009)[3]
£70.3 million (2009)[3]
£44.2 million (2009)[3]
Number of employees
13,801 (2009)[3]
SubsidiariesFopp
MAMA Group
7digital (50% Stake)
WebsiteHMV Group,
HMV UK,
HMV Hong Kong

HMV Group is a British global entertainment retail chain with operations in the United Kingdom, Hong Kong and Singapore. It is listed on the London Stock Exchange and is a constituent of the FTSE Fledgling Index. Acquisitions by the HMV Group include Waterstone's in 1998 from W H Smith[1] (sold in 2011), the music retailer Fopp in August 2007, and selected Zavvi retail outlets in February 2009.[4]

Trevor Moore became Chief Executive Officer (CEO) on 3 September 2012, replacing Simon Fox.[5] HMV stands for His Master's Voice, a painting created in 1899[6] by Francis Barraud, of the dog Nipper listening to a cylinder phonograph. For advertising purposes this was changed to a wind-up gramophone, and eventually used simply as a silhouette.

On 14 January 2013 it was announced that HMV Group would enter administration on the morning of 15 January 2013.[7] Deloitte are to be appointed to deal with the administration of the company.

History

20th century

HMV flagship branch on Oxford Street, London

The antecedents of HMV begin in the 1890s at the dawn of the disc gramophone. By 1902 it had become the beginnings of the Gramophone Company. In February 1907 they commenced building of a new dedicated record factory at Hayes, Middlesex. Disc records were sold in music shops and independant retailers at this time. In 1921 the Gramophone Company opened the first dedicated HMV shop in Oxford Street, London, England;[8] composer Edward Elgar participated in the opening ceremonies.[9] at the previous premises of Imhof, a manufacturer of orchestrion mechanical musical instruments and latter record dealer. In March 1931 the Gramophone Company merged with Columbia Graphophone Company to form Electric and Musical Industries Ltd (EMI).

From the 1930s onwards, HMV manufactured radio and television sets and radiograms under the HMV and Marconiphone brand names in their factory at Hayes Middlesex.

In 1966 HMV began expanding its retail operations in London. Throughout the 1970s, the company continued to expand, doubling in size, and in six years became the country's leading specialist music retailers. It faced new competition, however, from Virgin Megastores, established in 1976, and Our Price, established in 1972.[9] Subsequently, HMV overtook Our Price in popularity and threatened their existence, having established a chain of newer, larger stores.

Growth continued for a third decade in the 1990s. In 1996, when the company celebrated its 75-year anniversary, there were over 300 HMV Music stores internationally.[9]

In 1998 HMV Media was spun off from EMI, leaving EMI with a 43% stake in HMV Media. The same year, the company bought the Waterstone's chain of bookshops and merged them with Dillons.[10]

21st century

From March 1999 to September 2006 Alan Giles was the CEO.[11][12]

The HMV logo featuring Nipper and the gramophone

In 2002 the company floated on the London Stock Exchange as HMV Group plc, leaving EMI with only a token holding.[13]

All HMV stores in Germany were closed in 2003.

The group became susceptible to a takeover following a poor period of trading up to Christmas 2005. Private equity firm Permira made a £762 million conditional bid for the group (based on 190p a share) on 7 February 2006, which was rejected by HMV as an insufficient valuation of the company.[14] Permira made a second offer which increased the value, although HMV declined it on 13 March 2006, subsequently issuing a statement that the offer undervalued the medium and long term prospects for the company,[15] resulting in Permira withdrawing from bidding.[16]

In 2006 the HMV Group purchased the Ottakar's book chain and merged it into Waterstone's. The merger tied in to HMV's strategy for growth, as many of the Ottakar's branches were in smaller towns and outposts. The Competition Commission provisionally cleared HMV Group, through Waterstones, for takeover of the Ottakar's group on 30 March 2006. The Commission stated that the takeover would "not result in a substantial lessening of competition".[17] Waterstones then announced that it had successfully negotiated a takeover of Ottakar's on 31 May 2006.[18]

All 130 Ottakar's stores were rebranded as Waterstone's prior to Christmas 2006. In March 2007, new Group CEO Simon Fox announced a 10% reduction over three years in the enlarged Waterstone's total store space, comprising mostly dual location shops created by the acquisition of Ottakar's.[19]

In 2007 HMV selected CLIC Sargent as its charity partner until 2010.[20]

HMV in the Manchester Arndale, England, now closed down. This store was a former Zavvi.

In early July 2007 retailers Fopp went into administration, with the closure of 81 stores and 700 staff made redundant. Towards the end of the month, HMV bought the Fopp brand and six of its stores. HMV claimed that the six stores had traded profitably prior to their closure, and that the deal would save around 70 jobs. They later added a seventh Fopp shop. Eventually HMV had ten stores with the Fopp name, including two new stores in Exeter and Gower Street, London. The Fopp Exeter store closed on 30 January 2011 due to the recent developments surrounding HMV's share price fall, leaving nine stores open under HMV ownership.[21]

On 24 December 2008, Christmas Eve, HMV's rival Zavvi, also an entertainment retailer, entered into administration. On 14 January 2009 a placing announcement by HMV revealed that they intended to acquire 14 of Zavvi's stores.[22]

On 18 February 2009 five additional Zavvi stores were purchased by HMV Group, to be rebranded as HMV outlets. An additional former Zavvi store in Exeter's Princesshay development was also added.[23] The acquisitions were investigated and cleared by the Office of Fair Trading in April 2009.[24]

HMV Curzon store in Wimbledon, London

On 1 September 2008 HMV Group launched Get Closer, a social networking site which allowed users to import their own music library, rivalling other providers including online music stores Napster and the iTunes Store.[25] The company also began piloting their refreshed loyalty scheme during 2008 under the name "pure hmv".[26] The scheme had previously ceased to operate after being introduced in August 2003. HMV closed Get Closer in September 2009.[27]

In the 2008 MCV Industry Excellence Awards, HMV was given the title 'Entertainment Retailer of the Year'.[28]

As part of chief executive Simon Fox's plans, HMV started a joint venture with Curzon Artificial Eye to bring cinemas to HMV and Waterstone's stores across England. The first trial store was in Wimbledon, London. The cinema is located above the shop in a former storage room converted into three separate screens and a bar. It has its own entrance, so can be visited outside store hours, and one within the store. The trial was deemed a success and HMV planned to open more, with HMV in Cheltenham, Gloucestershire and Waterstone's in Piccadilly, London lined up next.[29]

A few months later[when?] HMV entered into a joint venture with MAMA Group. The Group had purchased a 50% stake in MAMA Group in January 2009 as part of a deal to introduce the HMV brand to live music venues, including the Hammersmith Apollo.[30] On 23 December 2009, it bought the whole of the MAMA Group in a live music takeover deal worth £46m.

On 5 January 2011 HMV announced that profits would be at the lower end of analysts' forecasts due to falling sales, resulting in the share price falling by 20%[31] and an announcement of the group's intention to close 40 HMV stores, as well as 20 Waterstone's stores, mainly in towns and cities where the company operates at multiple locations. The first of the store closures began at the end of January 2011.[32]

On 5 February 2011 HMV Ireland announced that its profits had fallen by almost 90% to €465,000, compared to €4.1 million the previous year.[33]

The sale of Waterstone's to A&NN Capital Fund Management for £53 million was completed on 29 June 2011, and was approved by the vast majority of shareholders at an emergency general meeting.[34]

On the evening of 14 January 2013, various news outlets reported that HMV Group was to appoint Deloitte as administrator, putting its 4350 employees at the risk of redundancy.[35][36]

Worldwide operations

A large HMV branch in Leeds incorporating an Orange Shop

The group operates 273 HMV stores across the United Kingdom, Ireland, Hong Kong and Singapore. Of these, two are in Singapore and five in Hong Kong.

Stores in the UK and Ireland use a logo featuring a silhouette of Nipper the dog from the His Master's Voice painting. On 1 April 2007, HMV Group announced that Gromit, the animated dog of Wallace and Gromit fame, would stand in for Nipper for a three-month period, promoting children's DVDs in its UK stores.[37] HMV Hong Kong formerly used the same stylised gramophone as HMV Japan, although now use the same style of the logo used by HMV in the UK.

HMV store in the Elements, Kowloon

In 1994, HMV began operating in Hong Kong. HMV began relocating their store locations to shopping malls that are newly opened. HMV in Hong Kong appeals to the crowd that enjoy organised and free-sampling environment which many other records cannot match. However, the prices on their products especially those without promotion and discount are often higher than many independent record stores. HMV Hong Kong is the second place after the UK that launched in-store digital kiosks. It is also the first in Asia.

HMV was the second international music store established in Singapore, after Tower Records, which later closed down. As of 2012 it operated 2 stores in Singapore, at 313@Somerset (which replaces one formerly in The Heeren), after closing the other at the CityLink underground mall, with a second one at Marina Square. It is generally higher priced than other independent shops, and local chains such as Gramophone and That CD Shop offer lower prices. HMV is the only store that sells games, T-shirts, books and audio gear in addition to music and video.

Former international operations

Australia

In 1989 the HMV Group established its first Australian store in the Sydney suburb of Parramatta, closely followed by a second store in Chatswood in that same year. In 1990, HMV opened its flagship store in Sydney's CBD. The 13,000 square foot superstore in Pitt Street Mall was the largest music store in the Southern Hemisphere and sold more CDs than any other store in the country. It was also awarded the ARIA Charts store of the Year on 3 occasions. By 1998, a further 27 stores were opened in key retail centres on the eastern seaboard of Australia, including other large footprint stores at Melbourne's Bourke Street Mall and Brisbane's Queens Street Mall.[38]

In March 2000, HMV made local headlines when their larger rival, Sanity, signed a five-year deal with Festival Mushroom Records for a three-year online exclusivity window on all tracks downloaded from that label at Sanity's website. Sanity's competitors and other online services were meant to be blocked from Festival Mushroom's catalogue for that period unless Sanity agreed. Chaos.com and Leading Edge Music both made public threats to boycott Festival Mushroom's content, but HMV Australia (whose website did not offer downloading) followed through, removing all their CDs from their domestic stores, adding they would do the same overseas. By the next week, Festival Mushroom backed down, stating Sanity would simply be the wholesaler of their digital downloads for the next three years, requiring them to make all products available to other retailers at the time of release.[39][40][41]

In October 2005, Sanity's owner, Brazin Limited acquired the Australian operations of HMV for A$4 million (£1.7 million). The HMV Group's agreement with Brazin was to phase out the HMV brand in Australia by 2010. Immediately after this acquisition of HMV's 32 outlets, this put Brazin at its peak with its 74 Virgin Megastore and Virgin At Myer stores, in addition to Sanity's 215 and EzyDVD's 63 outlets around the country (not counting non-entertainment retail chains within Brazin such as, Bras 'N' Things) and was by far Australia's largest entertainment retailer. However, most HMV stores in Australia had very high overhead costs due to their large footprints and expensive locations, thus most were gradually closed upon the end of rental leases. The remaining stores were re-branded to Sanity over the next five years.[42] The horizontal merger was approved by the ACCC that same month leaving Brazin to merge marketing and general operations within the one entertainment division. Also in October, Brazin officially launched its Pulse loyalty card after a year of testing in the market. It worked by giving the customer one point for every dollar spent across the Sanity/Virgin/HMV/IN2 Music/EzyDVD/Bras 'N' Things/Dusk/Diva/Ghetto/Insane store network, receiving a $5 discount voucher or other offers once 100 points were reached.[43]

HMV's Australian flagship store in Pitt Street Mall was shut down on Friday 31 August 2007, when the Mid City Centre shopping centre it was located in was closed for renovation. In mid-2010 the last HMV store was closed in Brisbane by Sanity Entertainment, formerly Brazin Limited.

USA & Canada

In 1988 HMV Group began operating in Canada. This coincided with the bankruptcy, a few years later, of the Canadian record store retail chain A&A Records. HMV has also been cited as a contributor to the decline and eventual bankruptcy of two other major Canadian chains, Sam the Record Man and Music World (HMV in Canada was created by EMI Music Canada's buyout of the faltering Mister Sound chain in the late 1980s.)

HMV stores in the U.S. and Canada did not have rights to the His Master's Voice trademark; in those countries, that trademark is part of the RCA trademark portfolio owned by Technicolor SA and licensed to others. HMV Canada applied for use of the trademark, but its application was abandoned in 2010.[44] Though the initials "HMV" originally came from the His Master's Voice trademark, HMV was not prevented from using its initials in the U.S. and Canada.

HMV had a handful of stores in the Eastern United States, which in their final years were overseen by HMV's Canadian operations. In the 1990s they had a significant presence in Manhattan.

Poor real estate decisions made in the early 1990s rendered the United States stores uneconomical and HMV gradually extricated itself from leases, with the final store in the United States, having lost £500,000 in 2003 and £1 million in 2004, closed on 3 November 2004.[45]

In contrast, HMV has a strong position in Canada's music market, with 116 stores as of October 2007. In the two decades to 2006 HMV was awarded "Canadian Music Retailer of the Year".[46]

In 2005 HMV Canada took over a Virgin Megastore in Vancouver, allowing it to own, "Canada’s largest store dedicated to music and DVD".[47]

In June 2010 HMV Canada launched purehmv, a customer rewards program that offered store discounts and exclusive items across music, film, and gaming in exchange for points gained in-store.[48] Over 300,000 customers joined the scheme in its first four months.[49]

In the early twentyfirst century HMV Canada removed from sale all music and video recordings made by artists who had made exclusive distribution deals with other retailers for particular limited-edition or early-release titles; artists affected by this move include Alanis Morissette, The Rolling Stones and KISS.[50]

In June 2011 HMV sold its Canadian stores for £2 million to Hilco UK, a firm specialising in failing retail stores.[51]

On 3 November 2011 HMV announced that the iconic flagship store in Downtown Vancouver would close in January 2012, that a smaller location would open in a different area of Downtown Vancouver at some time in the future, and that the location in Richmond Centre would be closed.[52]

Japan

In July 2007, HMV Japan, which operates 62 shops, was sold to DSM Investment Catorce. The stores and HMV Japan website continue to trade as HMV, but is no longer owned by HMV Group.[53]

Since JVC Kenwood Holdings (through its JVC and Victor Entertainment subsidiaries) controls the His Master's Voice trademark in Japan, HMV Japan used a stylised gramophone of its own design as its trademark. As with the former U.S. and Canadian operations, HMV Japan's use of the initials "HMV" has never been challenged.

On 28 October 2010 the Japanese convenience store giant Lawson acquired all shares of HMV Japan from Daiwa Securities SMBCPI for ¥ 1.8 billion. KK HMV Japan became a part of Lawson, and was renamed KK Lawson HMV Entertainment (株式会社 ローソンHMVエンタテイメント) on 1 December in the same year. Terms of the deal were published on official websites.[54]

India

The first overseas branch of EMI was established in India in 1901. It went on make the first audio recording in India, of singer Gauhar Jan in 1902, and witnessed Indian cinema going talkies in 1931 leading to a boom in film based songs. The Gramophone Company of India was incorporated in 1946, and existed until 1985, when it was taken over by the RPG Group. On 2 November 2000, the company changed its name to Sa Re Ga Ma India Ltd. Sa Re Ga Ma controls a large repertoire of Indian film and non-film music, spanning a century.[55]

Product range

HMV stores stock a range of products including audio, books, Blu-ray discs, CDs, computer software and hardware, DVDs, video games, and have also expanded their range of clothing and fashion items through "The Studio" section of their stores.[56]

See also

References

  1. ^ a b "About Us History". HMV Group. Retrieved 15 January 2009.
  2. ^ ">"Quick Facts (Investors)". HMV Group. Retrieved 15 July 2011.
  3. ^ a b c d "Annual Report 2009" (PDF). HMV Group. Retrieved 10 March 2010.
  4. ^ "HMV snaps up Fopp name and stores". BBC News. 31 July 2007. Retrieved 15 January 2009.
  5. ^ "Directorate Change" (PDF). HMV Group. Retrieved 21 October 2012.
  6. ^ Brewers Dictionary of 20th Century Phrase and Fable
  7. ^ "HMV to go into administration". ITV News. 14 January 2013.
  8. ^ HMV Group History
  9. ^ a b c "EMI: A Brief History". BBC News. 24 January 2000. Retrieved 15 January 2009.
  10. ^ WH Smith unloads book shop chain
  11. ^ "HMV names Simon Fox as CEO from Sept 28, succeeds Alan Giles". Forbes. 18 July 2006. Retrieved 22 January 2010.
  12. ^ Damian Reece (12 January 2006). "HMV boss to quit as shops lose to internet". The Daily Telegraph. London. Retrieved 22 January 2010.
  13. ^ HMV moves to reassure as IPO revival begins to falter
  14. ^ "Retailer HMV rejects bid approach". BBC News. 13 March 2006. Retrieved 15 January 2009.
  15. ^ "HMV rejects second bid approach". BBC News. 13 March 2006. Retrieved 30 December 2006.
  16. ^ "HMV suitor Permira abandons bid". BBC News. 20 March 2006. Retrieved 30 December 2006.
  17. ^ Muspratt, Caroline (12 May 2006). "HMV merger with OOttakers cleared". The Daily Telegraph. London. Retrieved 16 August 2009.
  18. ^ Walsh, Fiona (1 June 2006). "Ottaker's accepts HMV takeover though price is slashed". The Guardian. London. Retrieved 16 August 2009.
  19. ^ Feltham, Cliff (29 June 2007). "HMV to stay on High Street despite falling sales of CDs". The Independent. London. Retrieved 16 August 2009.
  20. ^ "Partners". Clic Sargent. Retrieved 14 January 2009.
  21. ^ "HMV snaps up Fopp name and stores". BBC News. 31 July 2007. Retrieved 31 July 2007.
  22. ^ "Placing announcement". HMV. 14 January 2009. Retrieved 14 January 2009. [dead link]
  23. ^ "End of the road for Zavvi". Manchester Evening News. 18 February 2009. Retrieved 18 February 2009.
  24. ^ "HMV/Zavvi". Office of Fair Trading. 28 April 2009. Retrieved 24 December 2009.
  25. ^ Hall, James (26 April 2008). "HMV tries to Get Closer with social networking test". The Daily Telegraph. London. Retrieved 15 January 2009.
  26. ^ "HMV Plans Reward Card Roll Out". HMV. 30 December 2008. Retrieved 15 January 2009.
  27. ^ Duncan Geere (7 September 2009). "HMV shutters GetCloser.com social network". Pocket-lint. Retrieved 2 November 2012.
  28. ^ "MCV Awards '08". MCV. Retrieved 14 April 2008.
  29. ^ Wood, Zoe (25 October 2009). "HMV cinemas: coming to a high street near you". The Guardian. London. Retrieved 15 January 2009. {{cite news}}: Unknown parameter |guardian= ignored (help)
  30. ^ Leroux, Marcus (15 January 2009). "HMV Group plugs into live music market". London: Times. Retrieved 30 March 2010.
  31. ^ HMV warns on store closures. Financial Times.
  32. ^ Wearden, Graeme; Bowers, Simon; Wood, Zoe (5 January 2011). "HMV issues profit warning after grim Christmas". The Guardian. London.
  33. ^ Lynch, Suzanne (5 February 2011). "Music giant HMV Ireland saw a 90% fall in profits last year". The Irish Times.
  34. ^ Sweney, Mark (29 June 2011). "HMV Group completes sale of Waterstone's". Retail Gazette. Retrieved 29 June 2011.
  35. ^ http://www.bbc.co.uk/news/business-21021073
  36. ^ http://uk.news.yahoo.com/hmv-board-pondering-retailers-future-192420858--finance.html
  37. ^ Gromit steps into HMV logo role, BBC.
  38. ^ "Superbrands: HMV Australia". Superbrands.com. Retrieved 21 June 2012.
  39. ^ "News Corp Unit, Sainty.com Plan Online Deal". Telecompaper. Retrieved 21 June 2012.
  40. ^ Adcock, Bronwyn (9 March 2000). "ABC Radio PM: HMV boycotts the Festival Mushroom Group". PM (ABC Radio). Retrieved 21 June 2012.
  41. ^ Donovan, Patrick (17 March 2000). "New Deal Sounds Better To Retailers". The Age. Retrieved 21 June 2012.
  42. ^ "Brazin to buy HMV music stores for $4m". The Sydney Morning Herald. AAP. 28 September 2005. Retrieved 21 June 2012.
  43. ^ Visible Results Solution, "Austrlian Retail's Most Innovative And Dynamic Customer Loyalty Program" Says Brazin Limited CEO | Visible Results
  44. ^ Canadian Intellectual Property Office
  45. ^ "Operating Review" (PDF). Interim Report 2004. HMV Group. 17 January 2005. pp. pp. 3–4. Archived from the original (PDF) on 2 November 2006. Retrieved 30 December 2006. ...HMV USA, where the last store [of which] closed on 3 November 2004."; "...a £1.0m loss last year and £0.8m of losses made in HMV USA in the prior year... {{cite web}}: line feed character in |quote= at position 151 (help).
  46. ^ HMV Adds Gaming. Marketnews.ca. 28 August 2006. Retrieved 13 September 2006.
  47. ^ HMV to Open Canada’s Largest Store Dedicated to Music & DVD. Marketnews.ca. 28 June 2005. Retrieved 13 September 2006.
  48. ^ "hmv gets customers closer to the stuff they love with new rewards program". newswire.ca. 14 June 2010. Retrieved 30 November 2010.
  49. ^ "More than 300,000 customers join HMV's customer loyalty program in first four months". paymentsbusiness.ca. 22 November 2010. Retrieved 30 November 2010.
  50. ^ "HMV pulls Alanis product to protest Starbucks deal". CBC Arts. 14 June 2005. Retrieved 13 September 2006.
  51. ^ Amanda Andrews; Matthew Holehouse (27 June 2011). "HMV confirms sale of stores in Canada for £2m". The Daily Telegraph. London.
  52. ^ Music retailer HMV to close stores in January. Vancouver Sun.
  53. ^ "HMV snaps up Fopp name and stores". Japan sale. BBC News. 31 July 2007. Retrieved 31 July 2007. Separately, HMV said that the sale of the Japan business to DSM Investment Catorce, would allow it to focus on countries where it was a market leader. Opening in Tokyo's Shibuya district in 1990, HMV Japan now has 62 stores, with about 40 million visitors a year.
  54. ^ HMVジャパンの完全子会社に関する株式譲渡契約を締結 (in Japanese)
  55. ^ About us Sa Re Ga Ma.
  56. ^ "Home page". HMV. Retrieved 14 January 2009.
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