[ad_1]
Music shop chain HMV said it will return to profit this year and aims to open new stores in 2020, having been rescued from near-bankruptcy in February.
“We will 100 per cent be profitable this year, for the first time in a long time,” said Doug Putman, chief executive of Sunrise Records, the Canadian company that bought HMV from administrators.
Shedding lossmaking stores and renegotiating leases following administration had been the main factor, he added. HMV has closed 15 stores where it had been unable to agree new terms with landlords. These included its former flagship on London’s Oxford Street, where Edward Elgar once gave recitals.
“We were losing around C$2m a year on that one store,” said Mr Putman. “You’re just putting C$2m back in your pocket by giving it up.” Rent savings across the 114 stores ran into “millions and millions”, he added.
He said it was fair to describe the HMV Vault, opening in a former Ikea warehouse beneath a car park in Birmingham City centre, as the group’s new flagship. At 25,000 square feet, it is bigger than many supermarkets and contains a large live music space as well as more than 100,000 vinyl albums and CDs.
Mr Putman said the new venue would allow HMV to try out ideas. “There are always things you’re not quite sure about . . . this allows us to test and see what people really like.” Live performances at the store will kick off with former One Direction star Liam Payne playing on Friday and The Murder Capital and James Arthur over the weekend.
HMV stores have hosted 600 events since February but there are plans for around 2,000 in 2020. Vinyl is another change; it now accounts for 15-20 per cent of revenue, against “low single digits” when HMV was owned by restructuring fund Hilco.
However, Mr Putman criticised the UK’s business rates system. “Something needs to give there and quickly,” he said, adding that “we don’t have any stores in Canada where the tax is greater than either the rent or the profit”.
Despite this, Mr Putman said that HMV was financially viable even in an industry where sales are under pressure from downloads and streaming; 71 per cent of music sold last year was in streamed or downloaded form, according to the Entertainment Retailers Association.
[ad_2]
READ SOURCE
