A couple of years ago, the then-parent company of HMV spun off the Canadian division to a company called Hilco. They brought in some fresh ideas, made some hard choices about store locations, inventory levels and marketing and quickly turned HMV Canada into a nicely profitable business–which was more than could be said about the old HMV UK.
No amount of restructuring could save that company and they were sent into bankruptcy (“administration” in English parlance) which led them to sell all the assets–you guessed it–to Hilco. Many people had written off the chain (at least outside of Canada) as dead. But then Hilco applied many of the lessons they learned from their Canadian operations. And guess what? There’s new life in the old HMV. The Telegraph reports:
HMV’s Nipper the dog is rising.
Paul McGowan’s investment firm Hilco, which is a restructuring specialist, bought 144 HMV shops out of administration three months after it had collapsed.
Sceptics wondered whether McGowan would simply wind down HMV over time, but shorn of its debts, high central overheads, and worst-performing stores, the retailer is fighting back.
McGowan claims that HMV is now “very profitable” and does not have a single loss-making store in the UK. Not only is HMV a viable business, he believes, but it is growing.
One of the first things McGowan did was to sign a deal to return HMV to 363 Oxford Street – which the retailer had left in 2000 – and give up the company’s large store at the opposite end of London’s busiest high street.
HMV, which was once part of EMI, has also rebuilt its relationship with the key record labels and film studios. McGowan, who had already rescued HMV in Canada, offered to promote their artists and films through special events in a way that Amazon never could. The likes of Universal, 20th Century Fox and Disney want HMV to survive so it can promote their new products and protect them for the threat of falling margins as Amazon and the supermarkets slash prices.