HMV Group

{{Infobox Company | name = HMV Group PLC | logo = | fate = | type = Public () | foundation = London, England () | founder = | slogan = Get closer | location_city = Maidenhead, Berkshire | location_country = United Kingdom | locations = 815 stores in 7 countries (2011) | area_served = United Kingdom, Republic of Ireland, Canada, Hong Kong and Singapore markets | key_people = Philip Rowley (Chairman)Simon Fox (CEO) | industry = Retail | products = BooksVideo gamesFilmGamesMagazinesMusicFashionTechnologyMerchandiseCinemaLive VenuesTicketingArtist management | market cap = | revenue = £1,956.7 million (2009) | operating_income = £70.3 million (2009)

Simon Fox has been Chief Executive Officer since 28 September 2006. For this role he is paid an annual salary of £873,000.

HMV stands for His Master's Voice, a painting created in 1899 by Francis Barraud, A.R.A., of the dog Nipper listening to a cylinder phonograph. For advertising purposes this was changed to a wind-up gramophone, and eventually used simply as a silhouette.

History

20th Century

In 1921 the Gramophone Company opened the first HMV shop in London, England; the composer Sir 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).

, London.]] 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 1971, and Our Price, established a year later.

21st Century

From March 1999 through September 2006, Alan Giles was the CEO.

In 2002 the Company floated on the London Stock Exchange as HMV Group plc, leaving EMI with only a token holding.

All HMV stores in Germany were closed in 2003.

In 2006, the HMV Group took over the Ottakar's book chain, via Waterstone's, with which it was merged into, in a similar situation to the acquisition of Dillons. This merger tied in to HMV's strategy for growth, as many of the Ottakar's branches were in smaller towns and outposts.

Permira bid

The Christmas period of 2005 was disastrous for the HMV Group, with many product areas falling in sales. As a result, HMV itself became susceptible to a takeover, this time from a private equity firm called Permira. On 7 February 2006, HMV Group received a £762 million conditional takeover bid (based on 190p a share) from Permira, however it was rejected on the basis that it was an insufficient valuation of the company.

On 13 March 2006, HMV released a press statement declining a second offer from the private equity firm, even though it increased the value of the company, HMV felt that their firm was being undervalued and so rejected that offer of takeover as well. By the beginning of March 2006, HMV released a statement that the Permira offer undervalued the medium and long term prospects for the Group, resulting in Permira's withdrawal from the bidding.

Recent development

HMV began piloting their refreshed loyalty scheme during 2008 under the name "pure hmv". The scheme had previously ceased to operate after being introduced in August 2003.

In 2007, HMV selected CLIC Sargent as its charity partner until 2010.

In the 2008 MCV Industry Excellence Awards, HMV was given the title 'Entertainment Retailer of the Year'.

On 1 September 2008, HMV Group launched Get Closer, a social networking site which allows users to import their own music library and rivals current providers including Napster and the iTunes Store which are both examples of an online music store.

As part of chief executive Simon Fox's plans to turn the retailer into an entertainment group for all seasons, HMV started a joint venture with Curzon Artificial Eye to bring cinemas to HMV and Waterstone's stores across England. The first trial store was in Wimbledon, London. The cinema is located above the shop in a former storage room and has been converted in to three separate screens and a bar. It has its own entrance, so it can be accessed outside store hours, as well as one within the store. The trial was deemed a success and HMV plan to open more, with HMV in Cheltenham, Gloucestershire and Waterstone's in Piccadilly, London lined up next.

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.

On 5 February 2011 HMV Ireland announced that its profits fell by almost 90% to €465,000 last year compared to €4.1 million the previous year. It has not yet been confirmed whether some of the 27 stores operating in Ireland will cease trading under the redevelopment strategy currently being undertaken by HMV.

Takeovers

Ottakar's

The Competition Commission provisionally cleared HMV Group, through Waterstones, for takeover of the Ottakar's group on 30 March 2006. The Commission stated that the takeover would "not result in a substantial lessening of competition".

Waterstones 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.

Fopp

In early July 2007, retailers Fopp went into administration, with the closure of 81 stores and 700 staff made redundant. Towards the end of the month, HMV bought the Fopp brand and six of its stores. HMV claimed that the six stores had traded profitably prior to their closure, and that the deal would save around 70 jobs. HMV later added a seventh Fopp store to its portfolio. They will continue to trade under the Fopp brand. Since, HMV did have ten stores trading under the Fopp Banner, which included the opening two new stores in Exeter and Gower Street, London which did not have a Fopp Store previously. HMV closed the Fopp Exeter store on 30 January 2011 due to the recent developments surrounding HMV's share price fall. Nine stores are still open under HMV ownership.

Zavvi

, England. This store was a former Zavvi]] On 24 December 2008, Christmas Eve, HMV's rival Zavvi, also an entertainment retailer, entered into administration. On 14 January 2009, a placing announcement by the company revealed that they intend to acquire 14 of Zavvi's stores.

On 18 February 2009, five additional Zavvi stores were purchased by HMV Group, all will be rebranded to HMV outlets. A 6th store has been taken over from Zavvi: this is a store in Exeter's modern Princesshay Development. The acquisitions by HMV were investigated and cleared by the Office of Fair Trading in April 2009.

MAMA Group

By selling additional shares, the company will raise money to fund another joint venture with the MAMA Group, to run 11 live music venues, including the Hammersmith Apollo which is set to be renamed to the HMV Apollo. Other venues purchased include The Forum in London's Kentish Town, the Birmingham Institute and Aberdeen's Warehouse. HMV will also use the opportunity to create a tickets division which will have benefits for HMV loyalty card members.

A few months later HMV entered into an joint venture with MAMA Group. The Group had purchased a 50% stake in MAMA Group in January 2009 as part of a deal to introduce the HMV brand to live music venues, including the Hammersmith Apollo. On 23 December 2009, it decided to buy the whole of the MAMA Group in a live music takeover deal worth £46m.

Worldwide operations

Corporate identity

HMV shops in the UK and Ireland use the HMV trademark with Nipper the dog. In Asian markets, only the gramophone and not the dog is the HMV trademark. HMV stores in Canada do not currently have the rights to the Nipper trade mark, but have applied for use of it.

On 1 April 2007, HMV Group announced that Gromit, the animated dog of Wallace and Gromit fame, would stand in for Nipper for a three month period, promoting children's DVDs in its UK stores.

United Kingdom and Ireland

incorporating an Orange Shop.]] The company operates 379 HMV shops and 313 Waterstone's.(April 2008) HMV shops in the UK and Ireland use the HMV trademark with Nipper. HMV's flagship store in Dublin, Ireland has relegated music to the basement of the store.

Australia

In September 2005, HMV Group decided to sell its 32 Australian stores to focus on the UK, Irish, Canadian and Asian markets. Under the HMV Australia subsidiary, these stores were sold to Brazin Limited, known briefly in the UK as Sanity Music, for AUS$7.3m (£1.7m). The company also operates the Sanity Entertainment and Virgin Entertainment (Virgin at Myer) retail chain in Australia. The horizontal merger was approved by the Australian Competition and Consumer Commission in October 2005. The HMV group's agreement with Brazin is to phase out the HMV brand in Australia by 2010. Most HMV stores in Australia have very high overhead costs and most have been closed when their lease ends and the remaining stores converted into Sanity stores, if there is no Sanity store in the area.

HMV's Australian flagship store, located in Pitt Street Mall, Sydney, was shut down on Friday 31 August 2007, when the Mid City Centre shopping centre it was located in, was closed for demolition.

USA & Canada

In 1988, HMV Group began operating in Canada. This coincided with the bankruptcy, a few years later, of the Canadian record store retail chain A&A; Records. HMV has also been cited as a contributor to the decline and eventual bankruptcy of two other major Canadian chains, Sam the Record Man and Music World (HMV in Canada was created by EMI Music Canada's buyout of the faltering Mister Sound chain in the late 1980s.)

HMV stores in Canada do not have the rights to the Nipper trade mark.

HMV had a handful of stores in the Eastern United States, which in their final years were overseen by HMV's Canadian operations. In the 1990s they had a significant presence in Manhattan.

Poor real estate decisions made in the early 1990s rendered the United States stores uneconomical and HMV gradually extricated itself from leases, with the final store in the United States, having lost £500,000 in 2003 and £1 million in 2004, closed on 3 November 2004.

In contrast, HMV has a strong position in Canada's music market, with 116 stores as of October 2007. For the last two decades, HMV has been awarded "Canadian Music Retailer of the Year".

In 2005, HMV Canada took over a Virgin Megastore in Vancouver, allowing it to own, "Canada’s largest store dedicated to music and DVD".

In June 2010, HMV Canada launched Purehmv (Canada), a customer rewards program that offers store discounts and exclusive items across worlds of Music, Film, and Gaming in exchange for points gained in-store.

In recent years, HMV Canada has encountered controversy by removing from sale all music and video recordings made by artists that have made exclusive distribution deals with other retailers for particular limited-edition or early-release titles; artists affected by this move include Alanis Morissette, The Rolling Stones and KISS.

Hong Kong

, Kowloon]] In 1994, HMV began operating in Hong Kong. HMV began relocating their store locations to shopping malls that are newly opened. HMV in Hong Kong appeals to the crowd that enjoy organized and free-sampling environment which many other records cannot match. However, the prices on their products especially those without promotion and discount are often higher than many independent record stores. HMV Hong Kong is the second place after UK that launched in-store digital kiosks. It is also the first in Asia.

There are currently five HMV stores in Hong Kong.

Singapore

HMV was the second international music store to set up shop in Singapore, after Tower Records (which later closed down). It currently operates two stores in Singapore. One is at 313@Somerset (which replaces one formerly in The Heeren) and the other at the CityLink underground mall.

It is generally higher priced than other independent shops, and the local chains like Gramophone and That CD Shop pose a serious challenge. HMV, however, is the only store that also sells games, T-shirts, books and audio gear in addition to their music and video collection.

Japan

In July 2007, HMV Japan, which operates 62 shops, was sold to DSM Investment Catorce. The stores and HMV Japan website continue to trade as HMV, but is no longer owned by HMV Group.

India

The gramophone company HMV had an existence in India until the late 1990s, but later it was taken over by the RPG Group. Now the company is known as SA RE GA MA Music India Ltd.

Product range

HMV stores stock a range of products from audio, books, Blu-ray discs, CDs, computer software and hardware, DVDs, video games and most recently have expanded their range of clothing and fashion items through "The Studio" section of their stores.

See also

Fopp

Ottakar's

Waterstone's

A&B; Sound

Nipper, the dog featured in HMV's logo

The Hut Group

References

External links

HMV Group

Category:Companies established in 1921 Category:Defunct retail companies of the United States Category:Companies based in Berkshire Category:Music retailers of the United Kingdom Category:Bookshops of the United Kingdom