Troubled UK retailer HMV's banking syndicate has given the group more time to reverse its decline.
The rescue package will see the syndicate waive HMV's January covenant test on the retailer's borrowings and agree to re-test the group with more 'headroom'.
HMV believes that if current trading conditions can be maintained, it will be able to shrink its debts by 50 per cent over the next three years. The group aims to reduce the debt to between £175-180 million by the end of its financial year, reporting a loss of £10 million for the full year.
In a statement, HMV also revealed that it had renegotiated with film and music suppliers, offering a share of 2.5 per cent of its equity to the various companies.
The news follows a disappointing Christmas period for the retailer after sales nosedived.
"Today's announcement is enormously welcome," said HMV chief executive Simon Fox. "These developments represent a material improvement in our financial position relative to the statement we made at the time of our Interim results.
"The new relationship with our suppliers and the support of our banks will now enable HMV to wholeheartedly focus all of its energies - working in close partnership with its suppliers, on serving the changing needs of its customers ever more effectively.
"As a key part of this we remain committed to improving our specialist ranging and merchandising of music and DVD whilst also continuing to grow our sales in portable technology and further developing our online and digital offers."
The sale of HMV Live, which focuses on staging concerts in a number of music venues around the country, may yet go ahead, and isn't factored in to the three-year plan.
HMV has already had to sell Waterstones and HMV Canada.
Comments
7Throwing bad money after bad. The faster these overcharging rascals go out of business the better.
Perhaps they don't have much choice. Their online portion is reasonable. Their physical stores have more issues like rent. Councils need to learn if they keep upping costs they'll earn nothing because all the shops will be gone.
Giving 2.5% to suppliers could prove smart...
...but this is the music business and Hollywood.
I imagine it will be like the bar in Goodfellas after the owner gets Paulie as part owner;
"Business bad? Fuck you, pay me. Oh, you had a fire? Fuck you, pay me. Place got hit by lightning, huh? Fuck you, pay me. "
We need somewhere that sells tangible media in mass loads with good choice - can't think of anywhere better than HMV...Woolies used to be alright.
Walmart would destroy our high streets, but I might find that hyper-colour Massive Attack box set from the ninties I've always wanted. I tried to buy it off EBay, but some absolute fuck-nut tried to scam me...Internet purchasing and digital media isn't all that...
Beyond sentimentality, tangible media works and local retailers replace faulty goods (within reason). People are just buying the bullshit convenience and cool factor. Tangible media seems to decrease in price quicker than digital media, and covers/inlays add to the experience. It also reassures you to have a 'master copy'. Usage is also more universal...excluding games of course, which I really must get back to.
"We need somewhere that sells tangible media in mass loads with good choice - can't think of anywhere better than HMV...Woolies used to be alright. "
We really don't. If you want faceless media warehouses then Tesco and Asda are on their way to catching up what Walmart could offer and the internet beats all of them hands down.
Consumers need a reason to get off their ass and spend an extra 25% on media as appossed to buying online be it digital or a hard copy delivered.
The only way High st stores will survive is to make the customer experience more intimate. Knowledgable and passionate staff, listening posts (what happened to these and why should I buy a CD on guess work).
They can't compete by selling mass, bulk loads of chart and cheap DVDs as their over heads are too high.
They need instead to woo people, have staff demoing hardware, play something over the speakers that isn't what everyone is going to buy anyway.
Shopping on the High st should be an experience if it is to be profitable. Not the intense mind fuck of expensive soullessness that is HMV now.
In my retail working life I have worked for John Lewis, Apple, Fat Face and Zavvi.
Three of these companies championed great customer service over flogging tat.
Three of these companies still exist (Two of which are thriving) one is dead in the water, have a guess which one sold tat. (In before Apple tat jokes)
I can get it that day.
Fair point Dante, but that clearly isn't enough and still can't compete with supermarkets.
That and Shopto doing 24 hour delivery which is pretty dam close.
Not to mention preorders where online orders are turning up on time or often early.
"The only way High st stores will survive is to make the customer experience more intimate. Knowledgable and passionate staff, listening posts (what happened to these and why should I buy a CD on guess work). "
"They need instead to woo people, have staff demoing hardware, play something over the speakers that isn't what everyone is going to buy anyway. "
Interesting solutions one and all, but it sounds more workable for a boutique than one of the 'big boy's. Would I mind paying a little extra for this? No, no at all.
Re service, Edge's recent sympathetic piece regarding game store employees' incessant selling broke down a lot of the bug bears I have when it comes to high st shopping. One guy in our local Game really has a great approach though, where his obvious passion for the goods he sells takes away the whole (mutual, I'm sure) feeling of contrived pleasantries.
I don't know if you have much dealing with American companies, but I've noticed quite a decline in even their fabled customer service in my sector (banking...stop hissing at the back!), which is strange. Maybe the biggest problem in all of this really is that 'you just can't get the staff' anymore...one or two, definitely, but nowhere near the right level as a whole.
I thrive in customer service within my career, and it's usually enough to just display courtesy, understanding and one or two forms of solution. HMV actually outshine their rivals in these departments for me locally...except the manager who comes across as an overly aggressive Irishman who can't be bothered to shave for work...but he only rears his ugly head when he needs to, very rarely.
One last point, Xbox has played a part for me in seeing this decline in service standard. I've seen both Game and HMV employees having to tow the company line with regard to RRoD returns, usually apologetically, sometimes descending into confrontation from customers. This must really kill motivation, as tensions understandably run high. Maybe with your retail experience yoU could explain to me if this is a factor though? Would like to hear your thoughts on this.