Unfortunately, it's not uncommon to learn of music stores closing shop nowadays, but when a major retailer with stores across the UK, Ireland and Canada goes into administration - the situation almost seems dire. HMV isn't just some regular music store - its seeds were planted in the late 1890s alongside the disc gramophone. In 1907, the company established a record-producing factory and then in 1921, a retail store was opened. Today, the company has hundreds of stores around its supported regions.
To handle its situation, HMV called in administrator Deloitte. Last week, it failed to secure a £300 million loan that would have allowed it to pay off its debts and change how certain things are done. Unlike many companies that end up declaring bankruptcy, it's hard to say if HMV mishandled its money, or if this is entirely the result of the changing market. While HMV was once a monolith and a fear to small record shops around town, HMV is effectively that "small record shop" now, thanks to today's monoliths: iTunes and Walmart.
An area where HMV was slow to indulge was with an online store. Currently, you can't even order a CD online and have it delivered if you live in Canada, and to my knowledge, the UK didn't even gain the delivery ability until just a few years ago. But here lies the problem: a lot of people don't want the physical media, they want digital copies. While HMV owns a large share in digital online music store 7Digital, HMV itself doesn't offer digital downloads.
What will happen from here should be seen in a couple of weeks. HMV's obvious goal is to stay in business by any means necessary, so hopefully it manages to. The idea of going into a mall and not being able to hit up a music store sounds incredibly strange to me, and if the big guys go down, I'm not really sure how the little guys will continue to flourish.
On a side note, HMV did pull off a rather scummy move here. It appears that gift cards sold throughout the holiday season are effectively nullified - at least at the moment. The company would have known weeks in advance that the success of the company post-season would depend on the securing of its loan, but continued to sell gift cards anyway, knowing the risk. Not good.
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