It looks like HMV might survive as the only UK high street media retailer left standing. It’s struck a deal with suppliers including Universal Music, to effectively share the burden by getting the suppliers to shoulder the risk for stock; a bit like a jeweller does.
In return for their part the suppliers, which include Universal Music, EMI, Warner Brothers, Sony Music, Universal Pictures and Disney, will get a 2.5 per cent chunk of HMV’s equity. That gives the suppliers a vested interest to keep HMV afloat. In fact it was reckoned that if HMV collapsed it would be more damaging for the music and film industry in the UK than HMV’s shareholders.
HMV also saw better news from its banks, giving it relaxed loan terms. The combined news has potentially pulled HMV out of its tailspin. It’s also committed itself to generating one third of its revenue from electronics sales, including iPods and headphones.
So HMV won’t go bust just yet. Now all it needs to do is get shoppers coming back in and spending money, not buying their stuff from Amazon; that’s a pretty big task if you ask me. It’s apparently going to push a vinyl revival, but when was the last time you actually went into an HMV and bought anything, let alone a record? [The Guardian]
Image credit: Gene Hunt from flickr