Interview: Music Magpie boss on how recycling and reinvention has spurred success

“It’s been absolutely a heck of a ride,” laughs Music Magpie boss Steve Oliver, as the business he founded 13 years ago goes public on the London Stock Exchange.

Oliver set up the company alongside friend Walter Gleeson, having met while working in music retail. Setting up in the garage of Oliver’s house in Stockport, the pair built the business on buying and selling second-hand CDs, DVDs and video games. Wind the clock forward to today and, as Oliver proudly points out, Music Magpie is “the UK’s biggest mobile phone recycler” – a business that accounts for more than half its turnover.

Music Magpie has since grown into one of the biggest sellers of second-hand goods on eBay and Amazon, quickly pivoting to focus on the reselling of refurbished electronics and mobile phones after streaming services like Spotify and Netflix decimated the demand for second-hand CDs and DVDs. 

The company now makes 54% of revenues from the resale of consumer technology; 38% from CDs, DVDs, vinyl records and computer games; and 7% from books. It also has operations in the US under the Decluttr brand.

“You could say that the business has really evolved and pivoted a couple of times in its history,” Oliver reflects. He admits the etailer has also benefited from the shift to home working during the coronavirus pandemic with workers requiring new equipment to do their jobs remotely fuelling increased sales of products such as MacBooks and iPhones.  

Talking to customers

In the year to November 2020, Music Magpie’s revenues jumped 17% to £153.4m, while profits more than trebled from £4.6m to £13.9m. 

Off the back of that strong trading, Music Magpie made its £208m stock market debut today. At the time of writing, shares were up 3% on their opening price of £1.93.

For Oliver, who will share a £22.5m IPO windfall with Gleeson – now a consultant with the business – the underlying reason for the listing is to drive further evolution of the business. The majority of the £15m working capital raised will be put into Oliver’s next major project: mobile phone handset subscriptions. 

“It’s going to be a new income model for us – as well as an outright sale, we’re offering customers a monthly rental for a refurbished iPhone,” Oliver explains.

“The average subscription starts at £6.99 a month and since soft-launching this a few months ago, we’ve got over 5,000 sign-ups”.

But Oliver’s excitement about the opportunity the subscription model presents extends far beyond those revenue possibilities.

“If there have been any positives to come out of this horrible time, I think it’s the fact that the world has woken up”

Steve Oliver, Music Magpie

“It’s all about the relationship we can then have with the consumer, where we can talk to them on a monthly basis,” he says. “It’s an enhanced way for us to deal with customers and we think it has the possibility to be really transformational for the business.” 

Some of the capital Music Magpie has raised will also go towards extending its network phone recycling Smart Drop kiosks, which it began rolling out in Co-op and Asda stores last year.

After agreeing to a price for a phone on the Music Magpie website, customers within 20 miles of a kiosk are offered the option of completing a transaction there. Each kiosk is fitted with four HD cameras that check a phone’s make and model, unique serial number, its condition and whether or not it is locked to an account. Once those checks are completed, customers deposit that phone and receive the money through PayPal or a bank transfer. 

Music Magpie already operates 20 kiosks around the UK and while Oliver will not be drawn on specific targets to grow that figure, he insists the reaction from customers and its grocery partners has been “amazing”. 

“In stores where these kiosks have high visibility, we’re seeing customers buying or selling two units a day minimum,” he says. “And the grocers are absolutely delighted with them. It’s bringing in a younger demographic for them and our customers can get instant cash for their old phone to pay for their shop that week.” 

Mainstream appeal

It is on engaging with more consumers on recycling and the circular economy that Oliver becomes the most animated. Operating primarily online has helped Music Magpie emerge as one of the success stories of the pandemic but Oliver believes the crisis has also had a profound impact on the way people think about the environment and the future of the planet. 

“If there have been any positives to come out of this horrible time, I think it’s the fact that the world has woken up: be nice to each other; be nice to your neighbour; be nice to your planet,” he says. “It’s the same in retail. Sustainability is a megatrend at the moment but the whole circular economy, whether it’s fashion or furniture, is also booming.” 

“Second-hand used to be quite a niche sector and it wasn’t for everyone. That’s changing and fast”

Steve Oliver, Music Magpie

The retailer has already been given the London Stock Exchange’s ‘green economy mark’ for deriving 50% or more of total revenues from sustainable products and services but Oliver is excited about future opportunities to grow this amount.

“Second-hand used to be quite a niche sector and it wasn’t for everyone. That’s changing and fast,” he insists.

“It’s become a mainstream thing, accepted and seen as a smart and savvy solution for the customer and for the planet. Customers are increasingly asking themselves ‘why wouldn’t I do that?’ and that’s great.”

Music Magpie’s model has already been through more iterations than most since its formation 13 years ago. But with a new war chest at its disposal and bona fide sustainability credentials that will resonate with the post-pandemic consumer, Music Magpie is ready to truly spread its wings.