It’s an end of an era.
HMV, one of Canada’s largest music store brands since 1986, is shutting down.
This comes after major financial troubles, as the store has noticed a steady decline in customer turnout.
But what has changed? What made selling CF’s and music memorabilia such an impossible task for the British music company?
Darren Chapman, a professor of economics at Fanshawe College, thinks that it’s the changing times that have caused HMV’s demise.
But he also thinks that their sudden fall from grace could be largely affected by a trend-dependent business model.
“They have a lot of overhead costs; theirs is a volume type of product,” says Chapman. “They’re running on relatively low margins for each product that they’re selling, so that means they have to sell a lot of each product in order to make any meaningful profits.”
While some companies make attempts to adapt and change with the market, it didn’t seem like HMV made much effort to do the same.
Sunrise Records, an Ontairo based company, has found success in HMV’s downfall. They are expected to by 70 locations across Canada as HMV shuts down all operations.
Sunrise’s strategy? To sell to a more specific market of vinyl lovers that are willing to pay more for their product.
Chapman doesn’t think that kind of change in strategy was a viable option for HMV.
“I can’t see how they’re going to make a go of it anywhere else, unless they figure out a niche, like Sunrise has done, and is catering to that niche,” Chapman says. “HMV trying to downsize would still have the same problems.”
Now, as HMV locations across the country close their doors, they leave behind not only a piece of Canadian history, but represent a casualty in the every-changing music industry.