Jan 8, 2024 2 min read

Buoyed by positive physical stats, HMV considers expansion

HMV’s Managing Director has discussed plans to further expand the retail chain, in the UK and beyond, as the ongoing vinyl revival means the record industry’s physical product sales remain stable

Buoyed by positive physical stats, HMV considers expansion

HMV is considering further expansion in the UK and beyond to capitalise on the continuing vinyl revival and some renewed interest in CDs. Although, Managing Director Phil Halliday confirms in a new interview with the Daily Mail, "the timing and the economics have to be right" whenever considering opening a new shop.

The HMV MD was talking to the Mail following the recent re-opening of the retail chain's Oxford Street store in London, and the end-of-year figures from record industry trade group BPI which confirmed that vinyl sales continued to grow in 2023, while the decline in CD sales has slowed somewhat.

Noting those positive vinyl stats, Halliday says: "Based on the numbers of customers buying turntables, we don't expect that to fall any time soon as new fans build their collections". And CD sales, he adds, have been strengthened by "the rise in interest in J-pop and K-pop fandom in the UK, because it's the main physical format for both genres".

HMV is now owned by Canadian company Sunrise Records, which rescued the UK entertainment retailer from its second big collapse in 2019. Perhaps unsurprisingly, therefore, HMV’s renewed interest in international expansion has begun with some concessions in Canada.

Though it also has plans in Continental Europe. "We opened a first store in Antwerp to test the market in October last year", Halliday explains, "and that's been going well, so we will look at growth".

In the UK, HMV is already operating around 120 stores, which is pretty extensive, suggesting there isn’t much room for further growth. Although Halliday nevertheless insists, "there are definitely some cities that we want to be in where there isn't yet an HMV but the timing and the economics have to be right".

Of course, although physical sales are healthier today than most people would have expected ten years ago, physical discs are still a minority revenue stream for the record industry. And while, for some artists and labels, vinyl and CDs are still an important part of the mix, for others they simply aren’t a priority.

And HMV still has work to do to safeguard its long-term future, reckons Dr Michael Heller at Brunel Business School, who also spoke to the Mail.

HMV’s downfall, he says, wasn’t just because of the shift to streaming, it also failed “to capture and hold on to a young demographic … which I'm not sure it has resolved". So, while older consumers may visit HMV's all-new Oxford Street store as "a form of nostalgia", there's a risk "young people continue to shun it".

Therefore, Heller reckons, HMV needs a strategy to connect with younger consumers. Though he says that likely requires some experiential marketing, providing "a reason for visiting the store which goes beyond the mere transactional". Which does seem to be HMV's current strategy, it increasing the number of in-store events.

Elsewhere in music retailers expanding news, Rough Trade has announced it will open a new store in Liverpool in the first quarter of this year. The independent retailer's sixth UK store will also be its largest and will include its biggest venue space.

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