Despite the continuing carnage on the High Street there are glimmers of hope emerging from the restructuring process currently being carried out on the music store HMV.
Why? Well as with any business restructuring the first step is to carry out a review which includes a thorough look at the accounts to identify any areas where savings can be made, the most obvious in this case being loss-making stores, onerous rental agreements and the employment roll.
Already the closure of 66 loss-making stores has been announced, plus a further 37 this week, and also administrators Deloitte have noted that landlords have been generally “flexible and supportive” during the ongoing efforts to restructure the business.
Most significant, however, may be the recent announcement that trading agreements for the supply of new stock have been signed with the majority of HMV’s suppliers, something that is generally unusual when a company is in difficulties.
It is clear that HMV’s business model needs to change to take account of the shift in consumer behaviour and deal with intense competition for the sale of music, DVDs and games from online suppliers, digital downloads and also from supermarkets.
HMV however has support from a record industry, particularly the independent labels, which is keen to maintain a High Street presence and can learn from other retailers that justify their High Street presence by providing consumers with a retail experience rather than just a place to purchase goods.
Artists, too, have expressed support with Elton John suggesting holding live gigs in the stores.
The secret is in the details. Customers have been quoted as saying they valued the opportunity to browse, to talk to knowledgeable experts when they are searching for unusual and niche items and to have a sample listen to tracks before they buy. With appropriate staff training, these could provide a USP for the retail arm of the business to highlight.
All this illustrates that a thorough business restructuring involves attention to detail and identifying those aspects that make it special or unique and that may just help it to survive by returning focus to core strengths that may have been lost sight of over time.
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