HMV closes its Hong Kong stores giving the growth of streaming and the decline in physical sales as the main reason for the decision to wind up the business. HMV Digital China Group Ltd, the ultimate owners of the stores, applied to the Hong Kong Stock exchange to wind up HMV Marketing Ltd (HMV Retail) on the 18th December 2018.
In its winding up petition the company declared that the revenue generated from HMV Retail was approximately HK$31.55 million, a decrease of approximately 41% as compared to the corresponding period in 2017.
The HMV Retail chain in Hong Kong has traded for 25 years and had seen the rise of the record industry and the heyday of CD, VCD and DVD home entertainment systems. In 2013, HMV Retail’s head office in the United Kingdom filed for bankruptcy winding up all its branches worldwide. The retail store business in Hong Kong resumed trading as HMV Retail shifting its business from not only selling traditional audio-visual products, but also a variety of lifestyle products, including earphones, speakers and toys, etc.
However, in recent months HMV Retail experienced a significant drop in sales due partly to the uncertain economic environment and the move away from physical audio visual media. The company noted that the HMV Retail business in Canada had closed all its 102 stores last year due to the impact of online streaming media and that HMV Retail stores in Hong Kong had suffered in a similar fashion.
The Board of HMV retail said that ‘HMV Retail has not been generating sufficient revenue to cover its own operating expenses and there is no reasonable prospect of making any significant improvement on its financial performance or operation in the foreseeable future. The Board believes that it is in the best interests of the Company and its shareholders as a whole to agree to the voluntary winding-up.’
The full text of the HMV Retail statement can be found here.
Physical sales of both music and video are in decline worldwide as streaming becomes the favoured consumer model. In addition, record and video shops are disappearing from high streets everywhere as online resellers such as Amazon continue to take market share from conventional bricks and mortar stores.
