When HMV fell into administration in 2013, it’s £176m debt threatened to close 223 shops and risk 4,000 jobs. Following Hilco Capital’s acquisition, however, HMV went on to report profits of nearly £17m that same year.
Among the employed strategies to turn HMV’s financial situation around was a deal to take its flagship store back to the 363 Oxford Street location where it began in 1921. At the time, Hilco founder and HMV chairman Paul McGowan suggested that the move reflected the company’s renewed focus on going back to its roots and getting the basics right.
HMV has since had several offers from firms interested in taking the business overseas, according to McGowan. Among those companies was Qatar-based Al Mana Lifestyle, which operates over 300 retail outlets. Hilco has agreed to expand the company in the Middle East through a licensing agreement with Al Mana. It will also open further stores in Bahrain, Kuwait, Oman and the United Arab Emirates, as well as look to source partners from brands in Egypt, Algeria, Tunisia, and Morocco.
“Following the successful turnaround of HMV in the UK, Ireland and Canada, we are delighted to have agreed a licensing arrangement with Al Mana to partner with them to establish the HMV brand in the Middle East,” said McGowan. “Al Mana has a proven and immensely successful track record in retail in the region and we look forward to working with them to establish and grow the HMV business.
“We continue to seek further opportunities to leverage the brand equity of the HMV brand worldwide and look forward to bringing HMV to other territories and sectors in the very near future.”
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HMV is also set to open concessions in 100 Tesco stores, as well as an additional five shops in the UK. Now owning over 125 shops in Britain, HMV said that CD sales rose 1.5 per cent in 2014, while DVD and Blu-Ray increased by 0.5 per cent.
Vinyl albums increased by 170 per cent, which reflects the company’s focus on vinyl. HMV music manager John Hirst claimed the company is going to take vinyl back to the masses.
“The independent stores still do an incredible job with vinyl,” Hirst said. “But what we do, which the indies don’t, is provide that consistently over 120 different locations all across the country. We’ve got to be the number one destination for vinyl on the high street.”
He suggested that this had allowed HMV to reclaim its position as Britain’s biggest music retailer from Apple Music. This was echoed by McGowan, who said that physical sales are “holding their own and even fighting back” while streaming services were “eating each other”.
McGowan referred to HMV as “completely dead” before Hilco took over, adding: “We are happy with where we are at this point in time. We are consolidating market share in all the markets we are in. It makes sense to look overseas.”
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