Holidays and music go together well. But here’s a different, altogether less cheery reason why they are current cohorts.
HMV, the music store, has revealed dire half yearly results. Its six month losses increased to £45.7m with sales falling 12%.
This continues the slide begun in a storm of heavy news for the CD and DVD retailer earlier this year when it published first quarter sales down 15.1%.
HMV has 258 ‘bricks and mortar’ stores. It now has debt of £163.7m and a share price that is a shadow of its former self at £2.90 (19th December) down 25% on the day. After liabilities, share capitalisation is just £12.2m.
The High Street store has a history of acquisitions that are distinctly questionable in the face of consumer trends and behaviour. As Amazon, the online book seller, began to flex its might across the globe to ultimately take an eye watering share of the market, HMV purchased Waterstones, the High St bookseller. Then Ottakar’s in 2006, a really stupid move and which then saw it swiftly absorbed within the Waterstone’s business shortly thereafter.
The Waterstone’s and Ottakar price tags were a combined £362m. Then to be sold in June this year for just £53m to a Russian oligarch. That’s some summer sale.
Simon Fox, the HMV CEO remains committed to the extreme and unnecessary expense of his numerous high rent stores. You’d think he would have learned his lesson from the book shop debacle, but sadly not.
Downloads and online sales of music and video are rapidly growing. Such a medium is cheaper, quicker and more convenient than traipsing to the shops. But that fact is lost on the HMV hierarchy it seems. Completely.
And so with music goes travel.
We’ve blogged here recently about another Chief Exec intent on keeping the head of a multiple town centre business model above the surface of the choppy wave of an ever strengthening eCommerce tide.
Indeed Thomas Cook are about to close 200 stores, making 600 people redundant. It is coupled with debt of over £1billion against reserves that it had in 2007 of over £300m. Their main man Sam Weihagen is, sadly, of the same denial as his contemporary Mr Fox. He is ‘committed’ to a High Street model whilst Opodo, Expedia and LastMinute dominate that industry.
We take no pleasure in chastising bosses who are at the helm of sinking ships. But the reality is that they each should have the foresight and instinct to change boats if the one that they are captaining has a bloody great hole in the side.
Wake up and embrace the way that the internet is changing consumerism for GOODNESS sake! Or allow it to overtake you at your peril. And that of your shareholders.