Music, DVD and games retailer HMV, camera retailer Jessops and
video-rental specialist Blockbuster have become the first
high-street casualties of 2013.
On 9th January, camera retailer Jessops confirmed it appointed
PricewaterhouseCoopers as administrators after suffering a
continued decline in sales. As a result, all 187 Jessops stores
are to close with the loss of around 1,370 jobs. A further 77
employees were made redundant at the head office in
Leicester.
Just days later, HMV has appointed Deloitte as its
administrators. Tough trading on the high street saw the
London-based company suspend trading in its shares on Monday,
14th January, after announcing it was failing to comply with its
banking covenants. A statement from Deloitte says the
administrator is still seeking a buyer for the business and
assets. HMV currently operates out of 223 stores and has 4,123
employees.
Deloitte was also appointed administrator at Blockbuster, which
blamed competition from online rivals for its demise. Blockbuster
has 528 stores employing 4,190 staff.
Dan Wagner, chief executive and chairman of mPowa and Powa
Technologies, which specialises in implementing online and mobile
retail platforms for some of the leading high street names, warns
that many more retailers could succumb to a similar fate because
of the cumulative effect of poor sales throughout the year.
“Retailers have to stay ahead of the game and have an
effective online and offline strategy in place if they are to
survive in this new technology-focused era.”
He estimates that UK consumers spend an average of £1,083 a
year on shopping online and “while this is good news for
British ecommerce businesses, those that didn’t have a digitally
focused strategy from the outset are now playing catch-up and the
consequences are clear to see.”
Commenting on the collapse of HMV, Rupert Eastell, head of retail
at accountancy, tax and business advisory firm Baker Tilly, was
not surprised at the news, “The failure of the only
surviving national music store comes hot on the heels of the
administrations of a list of established retailers including
Comet, JJB Sports, Clinton Cards and, most recently,
Jessops.”
According to Eastell, HMV, Jessops and now Blockbuster won’t be
the last household retailers fighting to stay alive in 2013. He
had a rather gloomy forecast, “The bad news is that this
year is predicted to be just as bleak, if not bleaker than the
last 12 months, and to ride out the storm successfully companies
really need to be fit for purpose and evolve with the times. They
simply cannot just rely on outdated and broken business
models.”
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