Comment: A refocus on music should have been a priority for HMV

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In 2002, Beverley Knight released her signature single Shoulda Woulda Coulda. It reached number 10 in the charts, because back then record stores still sold singles.

How things have changed since, and how pertinent the lyrics of that song are to the managers of the last major record store group. I wonder how many of them have heard of it.

A refocus on music was a ‘shoulda’ that many industry commentators, myself included, cited as an HMV priority. Even so, most opinion pieces so far have cast online channels as the villain in this high street drama.

But that’s far too simplistic.

It’s true that HMV was hit hard by the web, but this had more to do with Low Value Consignment Relief (LVCR) than the delivery channel. We all know the plethora of websites that took advantage of this VAT loophole and, with massively lower overheads, they undercut physical stores every time.

HMV eventually set up its own online offer, also availing itself of LVCR, and it ‘woulda’ worked if it weren’t for the resentment of regular customers seeing titles online that were significantly dearer in-store.

And there’s the rub. Non-pure-play operators have to maintain margins that allow them to service huge historical rent and rates commitments.

If they try to contend online they’re stymied by having to sell at higher prices on a platform that’s supremely adept at price comparison.

Any mass-market retailer with a large property portfolio is susceptible to the same fate. It’s virtually impossible for these companies to fulfill both bricks and clicks competitively without self-cannibalisation.

HMV and Jessops were just the closest canaries to the coalface, breathing the first whiff of a deadly breeze, but they won’t be the last casualties. For some, multichannel isn’t the problem or the answer. There’s now only one viable channel, but it’s one that their other liabilities prevent them from taking full advantage of.

That means, for HMV, there’s still an upside if these costs can be tackled quickly by the administrators. Maybe then it will have the chance to see what ‘coulda’ been.