HMV in administration: analysts' reaction

http://www.guardian.co.uk/business/2013/jan/15/hmv-administration-full-reaction

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Neil Saunders, managing director of research company Conlumino

HMV remains, to this day, a respected and loved brand. Our emotional connection with music means that consumers, of all ages, will have fond memories of the store. However, emotions don't pay the bills and the blunt truth is that HMV did not react early enough to the digital trend; it did not give shoppers a reason to keep buying from it. Admittedly, the company has tried to innovate through selling more electricals and gadgets but, unfortunately, these initiatives were never going to be enough to counteract the terminal decline in its core business.

Chuka Umunna MP, Labour's shadow business secretary

HMV is a national institution that has been a feature of our high streets for over 90 years so this news is deeply worrying. For the sake of HMV's employees, we hope a way can be found to keep the business going. The demise of HMV – a national institution – would be a sad loss for British retail.

Andrew Sentance, former member of the Bank of England's rate-setting committee

Comet and Jessops, now HMV. Is there more trouble in store? Since 2007, the [internet's share of] retail sales (excluding motor fuel) has risen from less than 4% to over 10% – with internet spending growing at around 25% per annum in value terms. Retailing faces a big adjustment to the "new normal" world of constrained finance, higher inflation and weak confidence. The growth of online retailing will contribute to this process of structural change. Retailers which can realise the cost and convenience advantages of multi-channel retailing will be much better positioned to achieve sales growth and protect profit margins than those locked into large legacy property portfolios.

Gregory Mead, chief executive of music analysts Musicmetric

The changing face of music, and that of digital technology, has overhauled the way we interact with records, means that artists can engage directly with fans, meaning physical retailers have needed to evolve as well. While previously it was all about CD releases and the Sunday chart show, now the most important thing is knowing where your fanbase is and what drives them so you can market to them directly and maximise revenues from a myriad of sources.

Glyn Mummery, partner in restructuring firm FRP Advisory

HMV's collapse is symptomatic of the worsening malaise in large parts of the traditional high street. The electrical goods and entertainment industry is in particular hard hit as it fights to survive a game-changing online environment from product availability to purchasing patterns. While both click-and-collect and online-only retailing is thriving, a simple bricks and mortar strategy will struggle.

Maureen Hinton, analyst from Verdict Research, on the BBC

If [HMV] had gone online 10, 15 years ago, it's got a very strong brand name, it could have built up a real presence. But at the moment if we think online you just think Amazon.

Kate Calvert, analyst at Seymour Pierce

We have long argued that the equity probably had no value and were unconvinced that the shift in product mix into portable digital technology would be enough to offset the structural pressures on its core business of physical music, vision and gaming from the move online and to the supermarkets.

Matthew Hopkinson, the Local Data Company

If you take it into account what we've seen in Jessops, all happening within one week, there are going to be some major holes in the high street. And HMV particularly has some very large stores – and obviously over 60% of their stores sit within shopping centres. So shopping centres will be hardest hit.