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HMV Shares Down 40%, Breach Of Banking Covenants Likely

Echoes of GAME, as another high street retailer looks to be in a spot of bother.


HMV, in a bit of bother.
According to reports, long-standing high street retailer HMV is in financial trouble, and there are suggestions it’s in talks with banks about breaching banking covenants next month.

An analyst at Conlumino said that the breach “raises very real concerns about the future of the business.”

“The unfortunate fact remains that HMV’s proposition has become increasingly irrelevant in the modern retail landscape,” said Joseph Robinson. “While the retailer has been proactive in attempts to evolve its proposition through a greater focus on technology, this does not constitute a persuasive long term plan for survival.”

“Furthermore, the Christmas period is unlikely to bring much respite; high consumer demand for technology will be directed towards online and specialists high street operators such as Curry and Apple, while HMV has the grocers to contend with in attempting to pick up the dregs of demand for physical entertainment products.”

The company reported a £36 million loss for the six month period ending in October.

That’s down on last year’s £50 million, although HMV’s debt has risen from £163 million to £176 million. HMV blames a quiet summer in terms of release schedule, and points to falling UK software sales – down nearly 30%.

HMV is one of the last true multi-media high street chains, and although their prices are often way off target in certain areas, it would be a massive shame for them to face any long term financial issues, as that would leave little more than online retailers and specialists like the already battered GAME alongside the supermarkets.

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15 Comments
  1. Jones81
    Member
    Since: Mar 2010

    Not suprised in the slightest, hmvs customer service is awful.

    example:

    i recently reserved a pair of beats headphones only to arrive at the shop to be told they didnt actually have them

    i also recently reserved a cd but when i got there it wasn’t where it was supposed to be and was told it ‘could be anywhere in the shop’ and was told i’d have to ‘look for it myself’ !. At that point i walked out in disgust.

    is it any wonder they’re going out of business?

    Comment posted on 13/12/2012 at 12:20.
    • Eldur
      Member
      Since: Nov 2012

      I laughed out loud when I read your post and saw that your avatar was Doctor Doom.

      I instantly imagined Victor in HMV and a conversation like:

      DD: ‘Well I pre-ordered my Cosmic Cube online to pick up in store’.

      HMV Bod: ‘I’m sorry sir, but Gareth in unpacking got his hands on it and used it’s vast reserves of untapped power to whip himself up two Page Three Stunners and a packet of Scampi Fries. You’ll have to go and find one on the shop floor.’

      DD: ‘Well what about my reserved copy of the Lighthouse Family’s Greatest Hits?’.

      HMVB: ‘Gareth got it stuck in one of the stunners sir’.

      DD: ‘This service is deplorable, even to one such as DOOM! I shall be writing to your manager…’

      Etc.

      Comment posted on 13/12/2012 at 16:54.
  2. bunimomike
    Member
    Since: Jul 2009

    I used to go to HMV before the internet happened. Um… says it all really. They specialised in products that could be bought on the internet for less money and without the Saturday scrum of shoppers. They could never compete with that and didn’t look to diversify properly as time went by.

    I feel sorry for them but equally apathetic to their management.

    Comment posted on 13/12/2012 at 12:28.
  3. Tuffcub
    On the naughty step.
    Since: Dec 2008

    They are stupidly expensive, £20 for a new release blu-ray.

    Comment posted on 13/12/2012 at 12:28.
  4. gaffers101
    Member
    Since: Oct 2008

    My local HMV always seems busy but I put that down to the very poor shop layout. I like to use HMV for my game trade-ins as they always offer better prices than Game, but I only ever use that money to buy cheap DVD’s or pre-owned stuff – I could never justify paying some of the prices they want for new stuff.

    Comment posted on 13/12/2012 at 12:29.
  5. Dom El
    Member
    Since: Mar 2012

    A number of friends work for HMV so this is worrying news. Their store makes a profit from what I understand, but clearly HMV must have lots of sites that don’t. After Game and Gamestation’s troubles HMV has become my go-to store for trade-ins, particularly as their prices are generally a lot better than Game’s these days.

    I hope that they do survive. The local high street will soon be devoid of shops I actually go in otherwise!

    Comment posted on 13/12/2012 at 12:48.
  6. avengerrr
    Member
    Since: Oct 2012

    Well honestly I think this is a little bit of a shame, I didn’t feel so sympathetic towards GAME because they are basically just a Bastard.

    HMV however can at times do really decent prices on items, they have undercut the greedy GAME on several games I have purchased and on the Vita I bought to which I saved £40 and GAME lost £270 because of their greed. HMV have also done solid trade-in prices that are more often than not better than CEX (A tramps hat is worth more than what GAME offer for games).

    Customer service does differ, not by per shop but by per colleague. Some people actually know what the customer is and others think they are speaking to plastic doll clearly. But then is all to do with recruitment and stuff and i don’t advocate the elitist systems that seem to rule these days.

    If we lose HMV, Amazon will indeed still get my custom, but it will be a mighty bloody shame as there will now be no way of trading in and no possibilities of flexible price reductions.

    Comment posted on 13/12/2012 at 12:57.
  7. Adam Garrett
    Community Manager
    Since: Feb 2009

    I buy everything at Amazon for often a much cheaper price and I have it arrive the next day (thanks to Prime). I hate how busy shopping can be with 100 pushchairs in the way, people walking at 0.01 mph and people stopping and talking in every doorway possible never mind having to drive there in the first place. For those reasons, I cant see myself venturing away from online shopping.

    Comment posted on 13/12/2012 at 13:04.
  8. Wardy77-
    Member
    Since: Dec 2012

    I’ve used HMV quite a lot this year as a few have said above there trade prices are usually some of the best out there would be a real shame to lose another real world retailer as I actually enjoy browsing real stores in real life with real life people occasionally instead of the faceless interactive less experience that is store browsing on the Internet don’t get me wrong Internet shopping is ok but it would be a far worse world without actual high street retailers some of my fondest memories as a child are going round the shops at Christmas time all the hustle and bustle the lights the atmosphere you can’t get that on the Internet…Bring back my Woolworths ;D

    Comment posted on 13/12/2012 at 13:11.
  9. Sympozium
    Member
    Since: Aug 2009

    Bring back 2 for £30 on gaming you eejits.

    Comment posted on 13/12/2012 at 13:26.
  10. LTG Davey
    andUandU
    Since: Aug 2008

    A mate of mine works at HMV and apparently their store is one of the stronger ones out there at the moment. Can’t say I ever shop there though, aside from occasionally using my mates 30% discount on new games.

    Comment posted on 13/12/2012 at 13:28.

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