Hilco is a specialist financial services company that has a history in restructuring distressed assets in the U.K and picked up HMV for £50 million ($82.7 million). The company has since closed poorly performing stores, stripped back on staff numbers and reduced overheads. It has also focused on offering a greater range than its rivals at competitive prices and "dramatically" increased the number of in-store events. Enrique Iglesias, Roger Daltrey from the Who and Ed Sheeran are just some of the acts that have performed in its stores.
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The company said in its second-quarter report that HMV U.K., HMV Canada and HMV Ireland all reported strong sales and market share growth for the period, outperforming the market for physical entertainment media in their respective territories. Like-for-like sales in the second quarter were up 9.2 percent compared to the year before, the company told CNBC, with a 13.8 percent rise seen so far in this current quarter.
And the company is starting to steal back market share from the supermarkets, according to research firm Kantar Worldpanel. For the 12 weeks ending July 6, its data showed that HMV had increased its share of the entertainment market in the U.K. from 13.6 percent to 14.7 percent – up from the record low of 10.7 percent following it being placed in administration. Amazon remains the entertainment market leader with a 21.8 percent share, it added.
February figures from the British Phonographic Industry said that revenues last year from sales of CD albums and singles and music videos declined by 6.4 percent but stated that this rate of decrease was better than expected. It also said that physical formats still account for half of U.K. recorded industry revenues. As well as selling physical music products, HMV does offer music and video downloads on its website but does not sell physical goods online like Amazon.
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Richard Perks, the director of retail research at research group Mintel International, was skeptical at the time of the takeover by Hilco and told CNBC on Tuesday that he still remains so.
"I'm impressed with what they've done," he said, but disputed claims that HMV would overtake Amazon, in terms of market share, in the near term.
"Online has great advantages in making a full range available to everyone, so in many respects online is a superior retail format," he told CNBC via email. "For all retailers online should be complementary to in-store so if HMV is to have a sustainable future it needs to have a strong online offer as well."