It was with a sad heart that I heard HMV was the latest high street victim of the internet shopping boom, calling in the administrators on Monday.
HMV, which currently operates 250 stores across the UK and employs 4,000 staff, had made moves to try and compete with internet giants like Amazon.
It launched its online store years ago, and has also invested a 50 percent stake in 7digital, but has only recently begun rolling out the ‘click and collect’ service, which has proved popular with other chains such as John Lewis and Argos.
The firm also made a big push into selling more premium items, such as headphones and games consoles, along with running a ticketing service, to decrease reliance on the fading CD and DVD business.
However, it still struggled to turn around its fortunes, and on Monday evening called in Deloitte as an administrator, which will let HMV continue to trade while it seeks a purchaser.
This is bad news for anyone out there who has yet to spend any HMV vouchers they received for Christmas, as these will no longer be accepted – though not as bad as for the thousands of staff set to lose their jobs so early in the New Year.
Overall, e-commerce sales look to be continuing their rise. As evidence of this, Visa on Tuesday reported that UK online payments were worth £96bn in 2012. This represents an 11.5 percent increase in online sales compared to 2011, and shows that almost a quarter of all UK spending on Visa is now made online. E-payments now account for 20 percent of all Visa card spending across Europe.
The rise in internet shopping has been a key blow to the high street chains, but this was compounded for those in the entertainment industry by the shift from physical to digital services like iTunes and Netflix.
HMV was the last-surviving high street music retailer, after the disappearance of other chains such as Virgin, Tower Records and Zavvi.
While some might argue that it was a dinosaur from the physical age, with its shops still full of plastic and paper, I for one will mourn the loss of the last remaining location on the high street where you could go in and browse through the latest films or music, and find some unexpected or niche gems. Supermarkets are fine if you’re happy being limited to the latest from One Direction or Susan Boyle, but they’re not exactly the place to go for cutting-edge entertainment choices.
The UK music industry could also be hit hard by the loss. Currently HMV accounts for 27 percent of all DVDs sold and 38 percent of CDs, and there’s no guarantee those sales will transfer to online or supermarkets.
Hopefully HMV will find a buyer who will be able to turn around the firm’s fortunes – Clintons and Waterstones are among those who’ve shown there’s potential for regeneration. If not, the only possible glimmer for the UK music industry is that the death of the final high street music chain will boost independent music and games shops.
The situation is especially harsh for HMV in light of the envious trading figures some traditional stores are reporting. John Lewis managed a rise of 15 percent for its 2012 Christmas trading period, compared to 2011, with the biggest boost from technology and electricals, up 31 percent.
But the co-operative also showed its skilled transition to the web, with online sales for the five weeks to 29 December up a whopping 44 percent on last year, while the firm’s website now accounts for a quarter of all its trading.
Whether it was a clever online strategy, or the snowman effect, John Lewis is certainly a model for the few remaining high street giants to attempt to emulate.
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