The last of the music retailers: HMV soon to shut shop?

10 Dec

 

 

 

 

 

 

 

 

 

 

 

HMV announced a loss of £40m today, suggesting the last of the entertainment retail chain could come to an end soon. This comes as a big blow to the high-street store after HMV reported heavy losses amid tumbling sales of CDs, DVDs and computer games.

The almost 90 year-old company has been ruined by competition from on-line stores, supermarkets as well as digital downloads. If this wasn’t bad enough, digital piracy continues to eat away at any profits. It is estimated illegal downloading costs the UK music industry £200m a year! HMV will be following Zavvi and Woolworths who have been victims of the digital era and the recession. “These results do little to ease fears that HMV is slowly being consigned to the history books,” said Keith Bowman, an analyst at stockbroker Hargreaves Lansdown.

HMV have been trying their best to diversify their business buying up venues such as the Hammersmith Apollo and G-A-Y and teaming up with Curzon to open up cinemas. Despite all the efforts HMV sales are down by 16% resulting in the company losing two-thirds of their value this year, meaning an estimated value of £154m. “The attempts made by the group to diversify into live music have had little effect,” said Richard Curr, at City firm Prime Markets. “The statement today paints a stark picture of a company in an increasingly rapid decline, with increased losses, falling like-for-like sales and soaring debt levels.”

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