HMV - History - 21st Century

21st Century

From March 1999 to September 2006, Alan Giles was the CEO.

In 2002, the company floated on the London Stock Exchange as HMV Group plc, leaving EMI with only a token holding.

All HMV stores in Germany were closed in 2003.

The group became susceptible to a takeover following a poor period of trading up to Christmas 2005. Private equity firm Permira made a £762 million conditional bid for the group (based on 190p a share) on 7 February 2006, which was rejected by HMV as an insufficient valuation of the company. Permira made a second offer which increased the value, although HMV declined it on 13 March 2006, subsequently issuing a statement that the offer undervalued the medium and long term prospects for the company, resulting in Permira withdrawing from the bidding.

In 2006, the HMV Group purchased the Ottakar's book chain and merged it into Waterstone's. The merger tied in to HMV's strategy for growth, as many of the Ottakar's branches were in smaller towns and outposts. The Competition Commission provisionally cleared HMV Group, through Waterstones, for takeover of the Ottakar's group on 30 March 2006. The Commission stated that the takeover would "not result in a substantial lessening of competition". Waterstones then announced that it had successfully negotiated a takeover of Ottakar's on 31 May 2006.

All 130 Ottakar's stores were rebranded as Waterstone's prior to Christmas 2006. In March 2007, new Group CEO Simon Fox announced a 10% reduction over three years in the enlarged Waterstone's total store space, comprising mostly dual location shops created by the acquisition of Ottakar's.

In 2007, HMV selected CLIC Sargent as its charity partner until 2010.

In early July 2007, retailers Fopp went into administration, with the closure of 81 stores and 700 staff made redundant. Towards the end of the month, HMV bought the Fopp brand and six of its stores. HMV claimed that the six stores had traded profitably prior to their closure, and that the deal would save around 70 jobs. They later added a seventh Fopp store to its portfolio. They will continue to trade under the Fopp brand. Since, HMV did have ten stores trading under the Fopp Banner, which included opening two new stores in Exeter and Gower Street, London which did not have a Fopp Store previously. The Fopp Exeter store closed on 30 January 2011 due to the recent developments surrounding HMV's share price fall. Nine stores are still open under HMV ownership.

On 24 December 2008, Christmas Eve, HMV's rival Zavvi, also an entertainment retailer, entered into administration. On 14 January 2009, a placing announcement by the company revealed that they intend to acquire 14 of Zavvi's stores.

On 18 February 2009, five additional Zavvi stores were purchased by HMV Group, all will be rebranded to HMV outlets. An additional former Zavvi store in Exeter's Princesshay development was also added. The acquisitions were investigated and cleared by the Office of Fair Trading in April 2009.

On 1 September 2008, HMV Group launched Get Closer, a social networking site which allowed users to import their own music library and rivals current providers including Napster and the iTunes Store which are both examples of an online music store. The company also began piloting their refreshed loyalty scheme during 2008 under the name "pure hmv". The scheme had previously ceased to operate after being introduced in August 2003. HMV closed Get Closer in September 2009.

In the 2008 MCV Industry Excellence Awards, HMV was given the title 'Entertainment Retailer of the Year'.

As part of chief executive Simon Fox's plans to turn the retailer into an entertainment group for all seasons, HMV started a joint venture with Curzon Artificial Eye to bring cinemas to HMV and Waterstone's stores across England. The first trial store was in Wimbledon, London. The cinema is located above the shop in a former storage room and has been converted in to three separate screens and a bar. It has its own entrance, so can be accessed outside store hours, as well as one within the store. The trial was deemed a success and HMV planned to open more, with HMV in Cheltenham, Gloucestershire and Waterstone's in Piccadilly, London lined up next.

By selling additional shares, the company will raise money to fund another joint venture with the MAMA Group, to run 11 live music venues, including the Hammersmith Apollo which is set to be renamed to the HMV Apollo. Other venues purchased include The Forum in London's Kentish Town, the Birmingham Institute and Aberdeen's Warehouse. HMV also used the opportunity to create a tickets division which would have benefits for HMV loyalty card members.

A few months later HMV entered into a joint venture with MAMA Group. The Group had purchased a 50% stake in MAMA Group in January 2009 as part of a deal to introduce the HMV brand to live music venues, including the Hammersmith Apollo. On 23 December 2009, it decided to buy the whole of the MAMA Group in a live music takeover deal worth £46m.

On 5 January 2011, HMV announced that profits would be at the lower end of analysts' forecasts due to falling sales, resulting in the share price falling by 20% and an announcement of the group's intention to close 40 HMV stores, as well as 20 Waterstone's stores, mainly in towns and cities where the company operates at multiple locations. The first of the store closures began at the end of January 2011.

On 5 February 2011, HMV Ireland announced that its profits fell by almost 90% to €465,000 last year compared to €4.1 million the previous year. It has not yet been confirmed whether some of the 27 stores operating in Ireland will cease trading under the redevelopment strategy currently being undertaken by HMV.

On 29 June 2011, the sale of Waterstone's to A&NN Capital Fund Management for £53 million was completed and was approved by the vast majority of shareholders at an emergency general meeting.

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