HMV is bust. That is old news now but I’m writing this as I’m totally appalled that HMV is not honouring its gift vouchers that it sold before Christmas. Industry experts have estimated that there are £100 million worth of vouchers outstanding. My brain is metaphorically boiling with righteous indignation and steam is metaphorically coming out of my ears.
You know, if a company gets a gift of one hundred million pounds (without having to provide any product in return) and still goes bust you really have to question their accounting. Something has gone wrong.
HMV created a new advertising campaign in the run up to Christmas knowing that they were going to fold even with a festive season’s trading and all of the free money from the voucher sales. They will argue that they didn’t ‘know’ they were about to fold in the same way that a theoretical physicist will say he doesn’t ‘know’ that the Earth goes around the Sun. They both know and no amount of italics can get them off the hook.
In theory, we could have been invaded by space-creatures from the outer solar system. Titan, why not – that Brian Cox program is pretty great. That’s right. Aliens arriving in an RAF roundel-decorated 24k gold spaceship from Titan in theory could have arrived on Christmas Day and offered to pay off the debt in dwonf-ruboons , their local currency. Or failing that, they’d pitch their bad-holiday-tattoo curing alien saliva to the bastard-panel on Dragon’s Den. Or, heck they’ll may have wanted to trade their gold spaceship in for 24 tonnes of DVD Box Sets of The Wire. Anything to keep HMV going and them Titanians are mad for The Wire. There was even a chance that I’d win the Intergalactic Trillions Lottery without even entering or it existing, and take over HMV, combining our businesses as VoxBox-HMV. We’d resurrect the HMV label and try to sell vibrations to platinum rich solar systems in other galaxies.
I know, and we all know, and every man and his Nipper knows that HMV knew while they were selling their vouchers that their company would be in administration in January and the vouchers would be worthless. They really, really, really did know.
The only way HMV could have survived is if the banks that they owed money to would dramatically write off the debt and their town centre megastore landlords would reduce the rent, the councils would cut their Council Tax and the music distributors would give them stock on sale or return and cheaply. That and a really good Christmas.
Downloads did not kill HMV. EMI did, ten years ago. EMI sold off HMV in 2002 with rent agreements that could destroy any large company. They pocketed some money in the sell off and left £150million of debt with HMV. The company never dealt with the debt. The management, used to fat salaries and perks, never seriously attempted to reduce the debt until recent years when the banks made them sell off all the most profitable bits of the business.
HMV have made a loss for at least 7 of these 10 years and that is despite turning over 2 billion pounds a year for most of that time. Have a look at the accounts and you’ll see that the top brass have enjoyed fantastic salaries (and pensions) and bonuses for years while running a company that was either making a tiny margin or losing money.
The press have focused on the music download, online competition –the tax avoiding Amazon in particular and HMV’s competition with sellers who did not pay VAT by basing themselves in the Channel Islands (Amazon again, and Play.com).
When you think that about a third of all physical music in the UK was still being bought from HMV even despite their inflated price then you can see that there is still a market for physical product.
EMI guaranteed the rents for some HMV stores so they may end up getting their comeuppance after all.
Fopp, are owned by HMV. Presumably Fopp is profitable and will be sold off to someone. I have mixed feelings about Fopp. I was in today and bought some records. Their pricing is Bizarre though. £27 for Bob Dylan’s Greatest Hits! We sell the mint original for about £8.
Fopp often sell records cheaper than we could buy them from the distributor. It will be interesting to see what happens. I imagine that, like Rangers Mk II, HMV will still continue to exist –someone will buy the UK trademark and open some music shops.
Anyway, I’m rambling but the point of this was that we have only just resurrected the Record Token as a gift for the record loving friend or relative. And that is partly why I am furious at that HMV over their selling of vouchers while insolvent. For me, they have ruin……. And on and on. I give up.
Rant over. Phew.
Our Record Tokens are guaranteed by our self respect and decency.