|Founded||London, United Kingdom (20 July 1921 )|
London, United Kingdom
Number of locations
|Paul McGowan, Chairman|
|Revenue||£1,956.7 million (2009)|
|£70.3 million (2009)|
|Profit||£44.2 million (2009)|
Number of employees
HMV Retail Ltd, formerly HMV Group plc, is a British entertainment retailing company operating in the United Kingdom, Canada, Hong Kong, and Ireland. It was listed on the London Stock Exchange and was a constituent of the FTSE Fledgling Index. The first HMV-branded store was opened by the Gramophone Company on Oxford Street in 1921, and the HMV name was also used for television and radio sets manufactured from the 1930s onwards. The retail side of the business began to expand in the 1960s, and in 1998 was divested from EMI, the successor to the Gramophone Company, to form what would become HMV Group.
HMV stands for His Master's Voice, the title of a painting by Francis Barraud of the dog Nipper listening to a cylinder phonograph, which was bought by the Gramophone Company in 1899. For advertising purposes this was changed to a wind-up gramophone, and eventually used simply as a silhouette.
HMV owned the Waterstone's bookshop chain from 1998 until 2011, and has owned the music retailer Fopp since August 2007. It purchased a number of former Zavvi stores in February 2009, and also branched into live music venue management that year by purchasing MAMA Group. It sold the group in December 2012.
On 15 January 2013, HMV Group entered administration. Deloitte were appointed to deal with the administration of the company. On 16 January 2013, HMV Ireland declared receivership, and all Irish stores were closed. A week later, on 22 January 2013, it was reported that Hilco UK would buy the debt of HMV, a step towards potentially taking control of the company. The sale of HMV's Hong Kong and Singapore business to private equity firm Aid Partners was completed on 28 February 2013. On 5 April 2013, HMV was bought out of administration by Hilco UK for an estimated £50 million.
The antecedents of HMV began 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 the building of a new dedicated record factory at Hayes, Middlesex. Disc records were sold in music shops and independent retailers at this time. In 1921 the Gramophone Company opened the first dedicated HMV shop in Oxford Street, London, in a former men's clothing shop; the composer Edward Elgar participated in the opening ceremonies. In March 1931 the Gramophone Company merged with Columbia Graphophone Company to form Electric and Musical Industries Ltd (EMI).
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. Subsequently, HMV overtook Our Price in popularity and threatened their existence, having established a chain of newer, larger stores.
The company opened its flagship store at a new location on Oxford Street in 1986. It was the largest record store in the world at the time, and the official opening was attended by Bob Geldof and Michael Hutchence. Growth continued for a third decade into the 1990s, with the company reaching over 320 stores. HMV celebrated its 75-year anniversary in 1996.
In February 1998, EMI entered into a joint venture with Advent International to form HMV Media Group led by Alan Giles, which acquired HMV's stores and Dillons, leaving EMI with a holding of around 45%. The new joint venture then bought the Waterstone's chain of bookshops to merge with Dillons.
By 2002, EMI's holding in HMV Media was 43%, with Advent International owning 40% and management the remainder. The company floated on the London Stock Exchange later in the year as HMV Group plc, leaving EMI with only a token holding.
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. 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, resulting in Permira withdrawing from bidding.
In 2006 the HMV Group purchased the Ottakar's book chain and merged it into Waterstone's. The merger tied into 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 Waterstone's, for takeover of the Ottakar's group on 30 March 2006, stating that the takeover would "not result in a substantial lessening of competition". Waterstone's then announced that it had successfully negotiated a takeover of Ottakar's on 31 May 2006. 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.
On 29 June 2007, the entertainment retailer Fopp went into administration, with the closure of 81 stores and 800 staff made redundant. On 31 July HMV bought the brand and six stores that it said had traded profitably, saving around 70 jobs.
On 24 December 2008, Christmas Eve, HMV's rival Zavvi, also an entertainment retailer, entered administration. On 14 January 2009 a placing announcement by HMV revealed that they intended to acquire 14 of Zavvi's stores. 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. The acquisitions were investigated and cleared by the Office of Fair Trading in April 2009.
In January 2009, HMV bought a 50% stake in MAMA Group, forming a joint venture with the group called the Mean Fiddler Group. The deal introduced the HMV brand to live music venues, including the Hammersmith Apollo. On 23 December 2009, it bought the whole of the MAMA Group in a live music takeover deal worth £46 million.
HMV bought 50% of 7digital for £7.7 million in September 2009, as part of a strategy to increase its digital content offering. 7digital provided HMV's music download service, and the company planned to introduce an e-books service for Waterstone's.
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% 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.
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.
HMV sold the Hammersmith Apollo to AEG Live and Eventim in May 2012 for £32 million. It sold the remainder of MAMA Group to Lloyds Development Capital in December 2012 for £7.3 million, which also included the company's 50% stake in Mean Fiddler Group.
On 15 January 2013, HMV Group appointed Deloitte as company administrators and suspended shares, putting its 4,350 UK employees at the risk of redundancy. Store gift vouchers were initially declared void since holders are classified as unsecured creditors to whom the company owe the value, but were accepted again from 22 January 2013. HMV Ireland followed by declaring receivership on 16 January 2013, which required the company under Irish law to close all its stores immediately.
Restructuring firm Hilco UK bought HMV's debt from its creditors The Royal Bank of Scotland and Lloyds Banking Group, as a step towards potentially taking control of the company. It was revealed that the total debt Hilco had bought amounted to around £110 million, and that HMV owed around £20 million in tax to HM Revenue and Customs at the time of its entry into administration.
On 7 February 2013 Deloitte confirmed that 66 stores had been identified for closure. No fixed date was given for the closures but they were expected to take place in the following two months. The next day, Deloitte confirmed that an additional 60 redundancies, including the chief executive Trevor Moore, had been made at the group's head offices in London, Marlow and Solihull. Deloitte confirmed on 20 February 2013 that an additional 37 stores would close. On 26 February 2013, 6 stores were sold to supermarket chain Morrisons.
By 23 March 2013, Deloitte were seeking to complete a deal to sell 120 stores as a going concern. The decision to close several stores that had previously been identified for closure, including Stockport and Grimsby, were reversed following talks with landlords.
On 5 April 2013, Hilco UK announced that it had acquired HMV, taking the company out of administration and saving 141 of its stores and around 2,500 jobs. The total included 25 stores that had previously been selected for closure by Deloitte during the administration process. All 9 Fopp stores which HMV owned were also included in the purchase. Hilco also stated that it hoped to reopen an HMV store in Ireland following the closure of all stores in the country. The takeover deal was estimated at around £50 million.
On 9 June 2013 it was confirmed that Hilco Capital Ireland had purchased HMV Ireland, and would reopen five stores within six weeks.
The company moved its flagship Oxford Street store back to the original unit on 363 Oxford Street on 23 October 2013. HMV's existing store, itself the largest music store in the world, closed on 14 January 2014.
By 2014, HMV had gained the second highest share of the UK entertainment market, behind Amazon. The company's filing to Companies House in September 2014 revealed it had made a profit of £17 million in the 11 months since it had entered administration. In January 2015, HMV overtook Amazon to become the largest retailer of physical music in the UK.
As of August 2014, HMV has 125 stores across the United Kingdom, HMV also operate eight stores in the UK under the Fopp brand. Following the purchase by Hilco UK, it was reported that the company was seeking to reduce the number of store staff across the business, as part of an effort to save £7.8 million on the wages budget. Stores would lose security staff, cashiers and supervisors, with managers required to provide cover. As of August 2014, HMV has nine stores in Ireland.
HMV established a joint venture with Curzon Cinemas in October 2009 as part of chief executive Simon Fox's plan to bring cinemas to HMV and Waterstone's stores across England. The first trial cinema opened above the existing HMV store in Wimbledon, in a former storage room converted into three separate screens and a bar. It has its own entrance, allowing access outside store hours, and one within the store. The trial was deemed a success, and it had been planned to open additional cinemas in HMV's Cheltenham store, and Waterstone's in Piccadilly, London.
Independently of the UK operations, one store in Singapore and five in Hong Kong trade under the HMV brand, and are owned by the private equity firm AID Partners. Stores also trade as HMV in Canada, under the ownership of Hilco UK, although the Canadian business has been a separate entity since it was sold to Hilco in 2011.
The company relaunched its online store in June 2015, providing CDs, DVDs, Blu-ray Discs, and LP records for online order and home delivery via Royal Mail with exclusive stock also available.
HMV operate a loyalty scheme branded as "pure HMV", first launched in August 2003, but subsequently closed and relaunched in 2008. The scheme awards cardholders points for purchases, which can be collected and redeemed on a number of rewards including vouchers and memorabilia.
On 1 September 2008, HMV launched "Get Closer", a social networking site allowing users to import their own music library, rivalling other providers including online music stores Napster and the iTunes Store. The site was closed in September 2009.
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