Interview: HMV’s Doug Putman on stores, streaming and centenary celebrations

But its centenary year, reached in the midst of a global pandemic, may perhaps have proven the most challenging in HMV’s history.

During a turbulent period in which a host of other historic retail names have failed to weather the storm – Arcadia, Debenhams and Laura Ashley are among those to have disappeared from the high street since Covid-19 struck – many would have predicted HMV would go the same way.

In the 16 months to May 2020, as the coronavirus crisis was only just beginning to take a stranglehold on UK retail, HMV suffered an operating loss of £212,000, as sales slipped to £187.9m. Store closures would be expected compound its problems and make Putman’s turnaround task tougher still. 

But against those odds, HMV has not just reached its 100th birthday, but celebrated it in style. It launched a curated centenary vinyl collection and just a fortnight ago hosted a free Ed Sheeran concert at HMV Empire, in Coventry, for 700 revellers.

The retailer’s owner, Doug Putman, is only just getting started, however - and wants to create a business fit for the next 100 years.

“You never know what’s going to happen, even in the next few years, but I think we are well-positioned for the future,” Putman says, talking to Retail Week on a video call from his native Canada. The entrepreneur, who began his career in the toy industry, pivoted into the music scene when he acquired record store chain Sunrise Records in 2014. He added HMV to his empire two-and-a-half years ago, a month after it had tumbled into administration.

“When this [opportunity] came up, it felt perfect,” Putman recalls. “We already understood the business, we already knew how relevant the HMV brand is so it was really exciting for me.”

But a turnaround in its fortunes was never a given. Physical entertainment retailers have long been under pressure from the rapid rise of online streaming services such as Netflix, Apple Music, Spotify and Amazon Prime. Add in the impact of a global pandemic, when HMV’s 107 stores were closed for prolonged periods of lockdown, and Putman’s task became an even more monumental one.

Death of CDs at heart of the problem

Sales of CDs fell 18.5% in the UK in 2020, generating just £115m in revenue for retailers. In the US, 31.6 million CDs were sold in 2020 – a 96.6% slump when compared to the 924.5 million sold in 2000. In July, supermarket giant Sainsbury’s stopped selling CDs and DVDs in its stores as a result of the impact that etailers and streaming services have had on physical entertainment sales.

But Putman is adamant that consumers don’t operate on the basis of a binary choice between physical or digital entertainment, rubbishing the suggestion that the end of the music store is nigh.

“I don’t think it has to be one or the other. There are times where streaming is very easy to do and it’s so much easier if you’re working out, if you’re on the go,” he says.

“But you still can’t replace that tangible physical experience, whether it’s a piece of vinyl playing at home over dinner or when you have friends over. We know that a segment of the customer base is gone to streaming and some of them will be 100% streaming – they’ll never buy another piece of physical product.”

Others, however, have remained keen to own CDs, vinyl and blu-rays, even throughout Covid-enforced periods of lockdown. Putman says HMV’s online sales “absolutely skyrocketed” during the pandemic and have remained “a very sizeable piece of the business” since stores reopened in April. He now wants to target those customers who dabble in streaming services, but still want to own physical entertainment products.

“We are trying to encourage people to try vinyl who haven’t, to get the enjoyment of collecting it, the enjoyment of the sound,” Putman explains. “You hear a lot of people saying: ‘vinyl is going to come and go’, but they were saying that four years ago and it’s just gotten stronger. I think we are going to grow that base of people that want something that isn’t just digital.”

According to the British Phonographic Industry, vinyl will out-sell CDs this year for the first time since 1987. Putman believes that shift has been driven by younger demographics emerging as ardent investors in vinyl, in an era when popular musicians, such as Taylor Swift, are releasing albums in multiple formats – digitally, as CDs and on vinyl.

In the US, American singer Olivia Rodrigo returned to the top of the Billboard 200 last month following her album’s vinyl release – it racked up the second-largest sales week for a vinyl album since tracking began.

Putman believes such statistics highlight the changing demands of pop culture fans. “What we’re seeing is that people want attachment to the things they love,” he says.

“So if that’s Taylor Swift or if that’s a movie – it doesn’t matter what it is – what we see is that not only will they buy the vinyl or the CD or the DVD, they want to buy deeper into that artist or movie. So they’re picking up T-shirts, they’re picking up notebooks, mugs. It’s about getting that deeper connection.”

New bricks and mortar shops on the way

Putman is adamant that stores remain a vital tool to build that “deeper connection” with customers – HMV plans to open 10 new shops in the UK this year and Putman believes there is headroom to grow its estate to 150 locations across the country. The retailer will return to Oxford later this month when it opens a new 9,000 sq ft store, and it is on the hunt for a London flagship, two years after the closure of its famous Oxford Street site. Putman says it is also “very probable” that HMV will launch in other markets outside of Britain.

The Canadian has a bold vision to rekindle the music store heyday, with plans for artist signings and acoustic sets – events that have already performed well at its HMV Vault concept in Birmingham. The 25,000 sq ft space, which stocks 80,000 CDs, 25,000 vinyl records and features a permanent stage area to host live acts, opened in October 2019. Since then it has held performances from the likes of Becky Hill, Maisie Peters and former One Direction member Liam Payne.

“It adds to the overall business, it adds a great vibe to the store, it makes things a lot more exciting. We are definitely going to continue to double down on that,” Putman insists, undeterred by the impact the coronavirus pandemic has had on large events.

That could be just the start of Putman’s interest in the UK high street. In August he acquired Toys R Us and Babies R Us Canada, and admits a move to relaunch the brands in Britain, three-and-a-half years after its administration, is “definitely something we are considering”.

“Everything we’ve done with HMV and with Sunrise has led us to here and helped us to understand how to make stores better, how to make them more exciting,” he says. “There’s an interesting similarity, it’s entertainment, it’s fun.”

Competition from online rivals and the rise of streaming services may have removed some of that “fun” from entertainment retailing, but Putman is adamant HMV can regain its billing as the sector’s headline act.