Retail Day
Retail Week, today
Posts Tagged ‘HMV’
Gerry’s gone
Waterstone’s had a shocking Christmas and MD Gerry Johnson has paid the price and has left the business today.
It’s a move which will have the precious souls who work in the company’s stores celebrating in the aisles, as Johnson had become unpopular within the business, and parent company HMV’s chief executive Simon Fox has done the right thing - he probably should have done it six months earlier.
Personally I liked Gerry, although my view is probably clouded by the fact that he was a big cricket fan. The last time I had a proper chat with him was on the top deck of a 36 bus, where I’d bumped into him heading to the Oval for the Ashes decider last Summer.
He was never popular with the booksellers in his stores, but there was a bit of snobbery about that as his background - he came from Booker cash and carry - was as far removed from bookselling as you could imagine.
However, in recent months he’d started behaving a bit oddly, the clearest evidence of which was banning access to the Bookseller’s website for the company’s staff, which looked like a petty move. The disastrous launch of The Hub, the company’s new distribution centre, which compounded very weak sales trends, meant that Fox had no option but to make a change.
So what does his successor Dominic Myers do? Well, he doesn’t have to look far for inspiration, because many of the issues Waterstone’s faces affected HMV too. Fox has been very clever in reinventing HMV as a chain which is at the heart of entertainment in its broadest sense, with events in store, range extensions and tie ups with live venues.
Waterstone’s, in contrast, has lost what makes it distinctive, churning out best-sellers in a way which doesn’t give it a point of difference from either WHSmith on one hand or Amazon on the other. Giving it back a personality and re-establishing it as the place for book buying on the high street will be Myers’ biggest task, alongside sorting out the Hub.
The fact that he’s internal will be perceived by some as insufficiently radical, but means he has experience of HMV’s transformation and will be able to hit the ground running.
Some people are taking the disastrous sales figures as indicating the demise of high street bookselling. I hope and believe that’s wrong. E-readers notwithstanding, shoppers have far greater affinity with physical books than with physical CDs and DVDs, yet Fox has managed to reinvent HMV and give it a future at least into the medium term. Waterstone’s should, if anything, be an easier task.
A Christmas wish
Well the office is deserted this morning, but to be honest Oxford Street wasn’t much busier when I was down there earlier on. Admittedly it was about 10-ish so pretty early in the day, but I was surprised there weren’t more last minute Christmas shoppers out, particularly as many people will have had their plans disrupted earlier in the week by the weather.
Anyway it meant I could polish off my last few bits of gift shopping pretty straightforwardly and then head into the office. I’d been on the BBC earlier talking about Christmas sales, but the media interest in the sector is nothing like it was last Christmas Eve, when I vividly recall my last-minute panic shopping in Leadenhall Market being thrown into chaos by the collapse of Zavvi.
My saviour this morning was its former rival HMV, the last man standing in the entertainment sector, and it was a really pleasurable experience with loads of helpful and friendly staff on hand. Simon Fox has got that business in great shape and although his hand was forced by another suitor, his deal to buy live venues business Mama yesterday was yet another sign that he is building for the future so that HMV dominates the entertainment space beyond pure retailing.
HMV has done well out of the failure of its competitors, as will sister chain Waterstones from Borders collapse, but many in the industry have real doubts about its long-term future because of the structural change going on in how people buy and consume entertainment. I was speaking to someone a bit younger than me just the other day who loves music but said she hadn’t bought a CD in years, and I suspect many younger people are the same.
While I have no favouritism towards any retailer I think it would be tragic if this change meant entertainment and indeed book retailing disappeared from the high street, not just for HMV itself but for retailing generally, as a diverse range of businesses is vital to the health of the high street. Let’s hope Fox’s diversification of HMV can really give it a sustainable future - the jury’s still out but the fact he turned down the top job at ITV to stay put shows he believes the job can be done.
I’m off now to get wrapping but we’ll be publishing online between Christmas and New Year. Whether you’re in store or head office, I hope your Christmas numbers are everything you wished for, and that you’re able to enjoy a peaceful and relaxed Christmas.
ONS top of their game
The ONS numbers for November were out today and they’re not great, but we all knew already that November wasn’t the best month. I’ve spoken to quite a few of the big retailers this week and they’re all pretty calm considering it’s just a week until the big day - our front page headline tomorrow is “It’ll be alright on the night” and I think that just about sums it up.
That said I started my Christmas shopping, late as ever, on Tuesday night and I was surprised by how quiet Oxford Street was. Great news as a shopper, less good for retailers. While not deserted by any means, HMV (the east end one), the Pantheon M&S and Debenhams were all quieter than I’d have expected, and the pavements weren’t that busy either, although of course the Victoria Line was.
Only John Lewis seemed to be doing a roaring trade with long queues which fortunately seemed to be more down to the volume of shoppers than malfunctioning tills which were causing such major problems there last week. I’ve little doubt John Lewis are going to be the big winners this year - the stores feel on top form, the assortment is right and they’re pressing all the right buttons with their core middle class shoppers.
Anyway, would be interested to hear your experiences from around the country on how Christmas trade is shaping up.
There may be trouble ahead….
Next week we’ll get the BRC figures for November, and everything I’m hearing is that it’s looking quite tough out there, with November being a much weaker month than October or September. The apparel guys have been particularly hard hit apparently, not surprising given how mild the weather was, although this colder snap should be helping.
Just goes to show that there’s all still to play for. For what it’s worth my view is that Christmas will be OK - not amazing, but certainly not bad. But what do I know, a lot can happen over the next three weeks.
On a completely separate note, we often bang on about how retailers offer ever-better value to consumers in real terms, but I saw it for myself the other day when I was off sick. In between writing my feature on China I took the opportunity to upload some CDs which I never listen to, one of which - and regular blog reader Steve Lynn, of Brighthous and formerly of Virgin and Zavvi will like this - was Chasing Rainbows, the Greatest Hits of Shed Seven, probably York’s finest export after the Yorkie bar.
Anyway it still had a Virgin price stocker on it, and guess how much it was? £13.48! Now I can’t rememebr the last time I saw a chart CD priced at £13.48 but you’d be hard pushed now to find one for more than a tenner, even though there’s only one music retailer left on the high street. In my book that’s proof positive that retailers are a force for good.
Victoria’s secret
In Yorkshire over the weekend at a wedding and visiting sister at uni, and inevitably I managed to engineer an hour to spend walking the shops of central Leeds before catching the train home. Within a very small area Leeds manages to show off both the best and worst in UK retail.
The best is the Victoria Quarter, the network of arcades which is home to Harvey Nichols and a collection of other upmarket brands. Walk in there on a wintry afternoon as it’s getting dark, and it feels not only incredibly festive but also as though the recession never hapenned. It was packed yesterday and I couldn’t see any empty shops; proof perhaps that if you create the right retail environment shoppers will still come.
The Harvey Nics in Leeds is to me the best of the stores the luxury London department stores have opened in the regions. It suffers a bit from low ceilings and lack of room to circulate, but that doesn’t seem to matter as it has a buzz and an energy about it which is really refereshing. You can’t say that about some of the other stores HN, and indeed Selfridges, have opened.
The city centre’s mass market retail offer is in a bad way though. It boasts a collection of very sub-optimal shopping centres like the Leeds Shopping Plaza, the Merrion Centre and the St John’s Centre, packed with low-grade value stores, all of them really badly configured. Weirdest of all is the old Headrow Centre, now renamed as The Core, where the redevelopment appears to be complete but only about three stores - Sports Direct, HMV and New Look, oddly on its own on the first floor - appear to be open. Anyone know what’s going on there?
We don’t really need more shopping centres in the UK, but Leeds is the exception, so that retailers can get their hands on decent sized stores with the right floorplates. Both Land Securities and Hammerson have schemes on the block, with the LandSec scheme having marginally the better site - but for the good of the city, work needs to start sooner rather than later.
Fantastic Mr Fox…
….might have been a good choice for the opening feature at HMV’s first cinema in Wimbledon, but chief executive Simon is far too modest a character to go for that. So instead the City analysts and a few of us from the RW team got to see Terry Gilliam’s The Imaginarium of Dr Parnassus - notable for being the last film Heath Ledger was in before he died - which was preposterous but entertaining enough. Wouldn’t go out of my way to see it though, although Lily Cole is excellent.
There’s something quite weird about going to the cinema and it being full of people you know, all wearing suits. But the cinema itself looks like an excellent initiative and while it won’t change the world for HMV, it’s a very clever way of using dead space above the stores.
Interestingly Fox deliberately chose Wimbledon because it has one of Odeon’s best performing sites next door, which means that if the concept works there, it should work elsewhere. The two cinemas should serve very different markets because the HMV (which is a joint venture with cinema operator Curzon) is very comfortable and stylish, with a bar and cafe. Best of all, you can take a glass of wine or a beer into the film with you. Should definitely appeal to the more affluent locals who wouldn’t be seen dead in the multiplex next door.
So a good initiative symbolic of the way Fox is expanding the HMV brand into all aspects of how people consume entertainment. The fact he turned down the ITV job shows that, unlike many sceptics, he believes he can continue to reinvent the business successfully for the digital age.
….but the Nordics did well
is a line you always hear when DSGi has tanked in the UK, except they havent been able to over the past year or so because things got so bad that even the business in places like the Norway and the Faroe Islands started doing badly. However, it was back today as the company revealed another poor showing by the UK business….but at least the Nordics did well. Good on the Faroes - I’ve always like them ever since they beat Scotland at football.
I am beginning to be won round by John Browett’s transformation of DSGi, although I wouldn’t yet bet my house on it. The refurbished stores are a big improvement but more importantly he seems to be sorting out the service. I bought an ipod from an unrefurbished Currys Digital at Victoria Station on Sunday and the guy who served me was excellent, and totally on message - much more so than the miserable guy downstairs at HMV, where they were out of stock.
The Currys man was even proudly sporting his Lance Armstrong ‘Fives’ armband, which people are given when they’ve done Browett’s new customer service training scheme. If he can get this eternal bugbear right, the rest will be easy.
Actually I had a lot of good service on Sunday, at retailers as varied as Boots, Peter Jones and Poundland - now there’s a combination of stores for one day, and the assistants who served me were equally varied, from the very reassuring mature white chap in Peter Jones’s bed department, to the cheerful Muslim lady in a veil in Poundland in Brixton and the young black guy in Boots across the road, despite having to deal with customers who were verging on the insane. Just goes to show that even in challenging retail environments a smile still costs nothing.
My love affair with Poundland continues to know no bounds. Having bought umbrellas there four times over the Summer - identical to the ones that cost £8.99 in M&S a few doors away, only £7.99 cheaper - I discovered that they are among the only stockists of Seabrooks Crisps in London. I love crisps and Seabrooks are among the finest delicacies known to man but hard to find outside the north of England.
I also bought a copy of Dylan Jones’s book Cameron on Cameron in hardback. It clearly can’t have been a bestseller, but I think you can’t argue with paying just £1 to discover the innermost thoughts of the man set to be our next Prime Minister.
Tesco…..Alfresco
You bump into retailers in all sorts of places, but one place I’d never seen one was on the bus. But there I was on Saturday morning catching the number 36 home and I saw Gerry Johnson, the very amiable chief executive of Waterstones. He was off to the Oval to watch day 3 of the test, I was due to be going the next day - think I probably had the better deal!
Funnily enough I’d been sitting next to Gerry’s retail director, a very nice lady and former Retail Week Rising Star Awards winner called Cheryl Owen, at the Oxford Summer School the night before. Waterstones has lagged behind the recovery of sister company HMV, but has been quite rightly preoccupied with getting its desperately needed new supply chain hub into place. Once that’s sorted out, I think it will start motoring again.
Poor old Gerry gets a lot of stick from the notoriously sensitive people who run bookshops - read the comments on Sainsbury’s below this story on the Bookseller’s site for a brilliant summary of how they think - but someone has to do the job of dragging their mentality into the 21st century, otherwise they’ll end up like Borders.
Ahead of seeing England’s magical Ashes win at the Oval on Sunday - am trying to think of a retail connection but I can’t - I was lucky enough to be at the V Festival on Saturday, in Virgin Media’s amazing Louder Lounge. Seeing Myleene Klass there just being remarkably nice to everyone reminded me what a brilliant asset she is to M&S and Mothercare, the sort of ambassador any retail brand would like.
My favourite act was Lily Allen. A bit lightweight maybe but perfect for a Summer’s day and she’s obsessed with cricket, which is a rare but excellent trait in a woman. Moreover, she managed to get the words Tesco and alfresco to rhyme in one of her songs, which is the first example of a retailer being used in a hit single I can think of since Sainsbury’s featured in Rabbit by Chas and Dave. Unless anyone else can think of any others?
Weather or not?
June was a scorcher, but July has been a washout and the forecast for early August doesn’t look much better. Bad news for those of us planning to watch the Ashes, and for retailers which bought heavily into Summer product on promises of a really hot Summer.
The Met Office has today backed down on its forecast of what it’s PR team termed a “barbeque Summer“, but many retailers buy long-range forecasts from specialist companies and use them as a crucial part of their buying decisions. Opinions vary on the value of these forecasts - we publish a week-ahead one every week from Planalytics which is very accurate, but the real value to retailers is in the longer term view. I guess the key lesson is to use forecasts as part of your planning, but not to rely on them too much.
The man in the news today is HMV chief executive Simon Fox, who is in all the papers being linked with the chief exec job being vacated by Michael Grade at ITV. The link shows the stature in which Fox is held both within and beyond the retail world, rightly so because he has done a great job with the entertainment retailer.
It becomes increasingly apparent to me that the very best chief executives in retail are people who can effect genuine business transformation, and not many have the very special vision required to do that. Those that possess it, like Fox, are going to be in real demand.
That said, while he should be flattered by ITV’s interest, he’d be mad to take the job. I’m no expert in media but the structural problems facing ITV make HMV’s pale into insignificance, and while he has a great grasp of media, Simon is a retailer at heart. If he takes the ITV job, he’ll be a very brave man indeed.
Rising stars
Apologies for the lack of posts over the past few days - it’s been a hectic time here at Retail Week as we’re going through a few changes internally. I’m now off on holiday for a week but when I get back I promise faithfully to get back to posting every day.
The highlight of the end of last week was the judging day for Retail Week’s Rising Star Awards. We get all the candidates into our offices for a light grilling from our panel of judges, leading lights in the industry such as M&S HR director Tanith Dodge, House of Fraser’s brand director Matt Chambers and former HMV boss and now Fatface chairman Alan Giles.
I put my foot in it first thing by promising our judges lunch when there wasn’t any - “Welcome to the world of private equity” Alan laughed - but other than that the day went smoothly. While not all cope well with the pressure, even though we tell the judges to be nice to them, some always perform outstandingly and it’s truly refreshing to see people so energised with enthusiasm for the business of retailing. The awards themselves, on September 10, are always a hoot as all the shortlisted candidates let their hair down with quite some style.
Trying to encourage that enthusiasm for retailing is what prompted Philip Green to set up the Fashion Retail Academy, which held its annual prizegiving day on Tuesday. I wasn’t able to make but George went along and said it was a great morning, and the Academy seems to be going from strength to strength. I bumped into Philip outside the Dorchester on Wednesday night after a meeting of Retail Week’s 100 Club there - the thoroughly nice former M&S chief exec Roger Holmes was speaking - and it seems that whenever you meet him his enthusiasm for talking about retail and the businesses and characters that make it what it is remains utterly infectious. We need more retail leaders who are as outwardly passionate about the industry as he is.
