Owner of Currys and PC World says half its like-for-like sales growth in last quarter came from former Comet customers
Dixons has seen a significant boost in sales thanks to the collapse of its rivals Comet, Jessops and HMV.
The retailer, owner of Currys and PC World, said half its 13% growth in like-for-like sales for the three months to the end of March came directly from former Comet customers.
The chief executive, Sebastian James, said: “We saw the exit of a number of competitors and that has definitely been a contributor to us, especially in the last quarter.
“We had a goal of gaining our fair share of Comet business and I think we’ve done that.”
But the struggling European online operation Pixmania helped bring overall sales growth lower – to 7.7%. Pixmania, based in France, suffered a 36% fall in sales and James said he was looking to sell the business. The company indicated it would explore closing it down if it could not be sold.
The independent retail analyst Nick Bubb estimated Pixmania’s 2012-13 losses at over £40m.
In the UK business tablet sales increased 350% and the company said it expected further strong growth as only a third of households currently have one.
Oven sales have also increased significantly and James said the home baking craze sparked by Mary Berry and BBC2’s Great British Bake Off was helping, with enough sold in the last quarter to bake 2m cupcakes.
He added that the company would be in a net cash position for the first time in more than five years after having net debt of £108m last year.
He said: “We will end the year with a net cash position and that puts us in a really strong position to talk to our suppliers and stockholders and talk about growth.
“I think shareholders have had a pretty good ride and I’m glad to be able to see it.”
The shares hit a three-and-a-half-year high last month and were up more than 7% at 39p.
The electricals group Comet, camera specialist Jessops and music retailer HMV collapsed into administration earlier this year. HMV was bought by the private equity group Hilco, with about 100 stores closing.
Jessops has been resurrected by the Dragons Den star Peter Jones but James said about the revival: “We’re not trembling in our boots.”
Dixons competes directly with Amazon but James refused to be drawn on the online retailer’s tax affairs, only saying he felt Dixons had the customer service that Amazon lacked.
He said 80% of purchases involved a customer using the Dixons websites.
Bubb said: “The scale of losses at the wretched Pixmania e-commerce operation continues to amaze, but it is good to see that Dixons has the wind in its sails in the UK and Nordics.”
Hilco’s £50m deal secures 2,500 jobs at 141 shops with hopes of repeating success it had with HMV Canada
The sale of T-shirts and other artist memorabilia are expected to be at the heart of an optimistic “we are entertainment” revival plan for HMV, which was rescued by a turnaround firm in a £50m deal that has secured about 2,500 jobs at 141 of the retailer’s stores.
Hilco, the new owner, plans to concentrate on selling music and film and step away from selling consumer electronics. Music labels and film studios, keen to ensure that a major entertainment retailer remains on the high street, are understood to have agreed to support HMV with new supply terms.
The turnaround firm rescued HMV’s Canadian business in 2011 and boosted sales and profits by abandoning diversification into computer games and iPod docks in favour of more lucrative band-branded clothing and coffee mugs branded with the names of artists.
HMV was founded in 1921, with its first store on London’s Oxford Street opened by composer Edward Elgar, but it went into administration in January amid tough competition from supermarkets and online stores such as Amazon. It has also suffered as shoppers switch to digital downloads of music, films and computer games and use online services such as Spotify and Netflix, rather than browsing for CDs and DVDs on the high street.
Paul McGowan, chief executive of Hilco and the new chairman of HMV, said: “We hope to replicate some of the success we have had in the Canadian market with the HMV Canada business which we acquired almost two years ago and which is now trading strongly.”
Hilco’s success there meant it had been widely expected to snap up the UK chain since it paid a reported £40m for HMV’s £176m of debt in January, effectively giving it control over the retailer’s future.
However, refocusing on music is not without risk. Britons are switching to digital downloads much more quickly than Canadians with nearly 30% of music downloaded last year compared with about 20% in 2010, according to figures from retail analysts Conlumino. By 2015, about 45% of music is expected to be downloaded.
Neil Saunders, managing director of Conlumino, said: “In the short to medium term, there is an opportunity to make HMV profitable. The worry is that, over the long term, HMV is still a retailer without a proper purpose as every year more and more sales migrate online.”
Music lovers and film fans are not only switching to downloads, but buying more CDs and DVDs from internet stores. Last year, 73.6% of all music and film, including downloads and physical products, such as CDs, was bought online and that is expected to rise to 90% by 2015, according to Conlumino.
Hilco, led by McGowan and his business partner Andrew Pepper, has made millions from snapping up ailing retail and consumer businesses in the UK since it was set up in 2000. McGowan, Pepper and Hilco’s US parent company shared a £9.7m payout in 2011, on top of £22m the year before.
About 80 HMV stores will remain closed but the rescue saves nine branches of the Fopp music chain, including stores in Glasgow and Edinburgh, and 25 HMV stores which had previously been slated for closure. Hilco is also in negotiations with landlords in Ireland in a bid to re-open stores which were closed several months ago after HMV collapsed into administration.
HMV relaunched its website on Friday with the strapline “We are entertainment”, although it was not yet open for trading.
Hilco previously rejigged the Habitat household furnishings chain before selling it on to Home Retail Group, the owner of Argos. But not all Hilco’s rescue attempts have been a success. The company bought the books and entertainment chain Borders in 2009, only to close all its branches and put it into administration four months later.
HMV has been bought by restructuring group Hilco in a deal that will see 141 stores around the UK remain open (including nine Fopp stores). Has your local store been saved? Find out using our interactive map
Purchase protects 141 stores – with reprieve for 25 that had been earmarked for closure
HMV has been rescued by the restructuring expert Hilco, saving 2,643 high street jobs and 141 stores.
Hilco, which already owns HMV Canada, said the deal for the CD and DVD retailer included 25 stores that had been slated for closure, although 80 sites will remain shuttered. All nine branches of its Fopp music chain will also be saved.
HMV, founded in 1921 and famous for its Nipper the dog trademark, collapsed into administration in January after struggling to compete against cut-price supermarket offers and internet downloads. When it collapsed HMV employed 4,123 staff in 223 stores.
It is understood the chain was sold for £50m, but Hilco and HMV’s administrators Deloitte declined to comment on the sale price.
Paul McGowan, the chief executive of Hilco, said: “We hope to replicate some of the success we have had in the Canadian market with the HMV Canada business which we acquired almost two years ago and which is now trading strongly. The structural differences in the markets and the higher level of competition in the UK will prove additional challenges for the UK business but we believe it has a successful future ahead of it.”
mum just told me that hmv have been saved I AM SO HAPPY GUYS
— katy (@paleandcoy) April 5, 2013
HMV UK will be run by a Hilco team working alongside existing management. It will be led by Ian Topping, formerly chief executive of the South African retail group Steinhoff. McGowan will become HMV’s chairman. HMV’s former chief executive Trevor Moore was made redundant in February.
Topping said it was an “exciting investment” and believes the nation’s outpouring of grief when HMV collapsed “shows a strong desire for the business to continue to trade and we hope to play a constructive part in delivering that”.
Topping plans to take HMV back to its traditional musical roots by reversing an earlier decision to sell tablets in store in order to “reclaim the space for an enhanced music and visual range”.
HMV IS SAVED OMG I’M SO HAPPY RIGHT NOW! Ahahahahaha
— Antimony (@element_51) April 5, 2013
Major music labels and film studios, keen that a major entertainment retailer remains on the high street, are understood to have agreed to new supply terms with HMV and approved the deal.
HMV called in administrators from Deloitte in January but hopes of a rescue deal were raised just days later when Hilco bought HMV’s £176m of debt for a reported £40m. It was announced in February that 66 of HMV’s 220 shops would close over two months, at the cost of nearly 1,000 jobs. Another 37 store closures were announced later that month.
Nick Edwards, one of HMV’s administrators at Deloitte, said the accountancy firm was “delighted” to have been able to save “one of the world’s most iconic retail brands”.
The British Retail Consortium said: “The prospect of a significant number of jobs and stores being saved here is clearly good for people who are relying on that business for work and it’s good for many high streets up and down the country where these shops will be occupied and trading.”
At its peak, HMV had more than 400 shops around the world, more than half of them in the UK. It had a 35% share of Britain’s CD market in 2012.
The company lost £16.2m in its latest financial year, to the end of April 2012, despite collecting sales of £923m.
Composer Edward Elgar opened HMV’s first store on London’s Oxford Street in 1921. It hit 100 stores in 1997, floated on the London Stock Exchange in 2002, and had 200 stores by 2004.
The company relaunched its website on Friday with the strapline “we are entertainment” and thanked customers for their support in a blog.
We’re officially out of administration and under new ownership. The whole team’s working hard behind the scenes to bring you the new and improved hmv. A new website and digital services, a rebooted Pure rewards scheme, and a fresh approach to our stores are all in the works.
We’ve got some truly exciting stuff in store for you but all of this is going to take us a little while to perfect. For now, this site will keep you up to date on what’s going on – the latest releases and what’s coming up – while we get everything ready to come back with a bit of a bang later in the year.
.@johnprescott And apparently they’re having a special Chumbawumba section dedicated to you …
— Peter Kirkham (@Peter_Kirkham) April 5, 2013
The stores which have been saved are:
Aberdeen, Ayr, Banbury, Bangor, Basildon, Basingstoke, Bath, Belfast Donegall Arcade, Birmingham Bullring, Blackpool, Bluewater, Bournemouth, Bradford, Brighton Churchill, Bristol Broadmead, Bristol Cribbs, Bromley, Bury, Bury St Edmunds, Cambridge, Canary Wharf, Canterbury, Cardiff, Carlisle, Chelmsford, Cheltenham, Chester, Chichester, Colchester, Coventry, Crawley, Cwmbran, Darlington, Derby, Doncaster, Dundee, East Kilbride, Eastbourne, Edinburgh Fort Retail, Edinburgh Ocean Terminal, Edinburgh Princes Street, Exeter, Bristol (Fopp), Cambridge (Fopp), Covent Garden (Fopp), Edinburgh (Fopp), Glasgow Byres Road (Fopp), Glasgow Union Street (Fopp), Gower Street London (Fopp), Manchester (Fopp), Nottingham (Fopp), Gateshead, Glasgow Argyle, Glasgow Buchanan, Glasgow Fort, Gloucester, Grimsby, Guernsey, Guildford, Hanley, Harlow, Harrogate, Hastings, Hatfield, Hereford, High Wycombe, Horsham, Hull, Inverness, Ipswich, Isle of Man, Isle of Wight, Islington, Jersey, Kettering, Kings Lynn, Kingston, Leamington Spa, Leeds Headrow, Leeds White Rose, Leicester, Lincoln, Liverpool One, Livingston, Llandudno, Maidstone, Manchester 90 Market Street, Manchester Trafford, Mansfield, Merry Hill, Middlesbrough, Milton Keynes, Newcastle, Newport (Wales), Northampton, Norwich Gentlemans Walk, Norwich Chapelfield, Nottingham Victoria, Nuneaton, Oxford, Oxford Circus, Peterborough Queensgate, Plymouth Drake Circus, Poole, Portsmouth Commercial Road, Portsmouth Gun Wharf Quay, Preston, Reading Oracle, Romford, Selfridges Oxford Street, Sheffield High Street, Sheffield Meadowhall, Shrewsbury, Solihull, Southampton, Southend Victoria, Southport, Speke Park, Staines, Stevenage, Stirling, Stockport, Stratford upon Avon, Stratford City Westfield, Sunderland, Sutton, Swansea, Taunton, Thanet, Thurrock, Truro, Tunbridge Wells, Uxbridge, Westfield London, Wimbledon, Winchester, Wolverhampton, Worcester, Worthing, Yeovil, York.
The stores to close are:
HMV stores in N Ireland that will close: Ballymena, Belfast x2, Coleraine, Craigavon, Derry, Newry, Newtonabbey. Staying open: 1 in Belfast
— Marcus Leroux (@marcusleroux) April 5, 2013
Ashford Ashton Under Lyne Ballymena Barnsley Bayswater Whiteleys Belfast Forestside Bexleyheath Birkenhead Birmingham The Fort Blackburn Bolton Boston Bournemouth Castlepoint Bracknell Burton Upon Trent Chesterfield Coleraine Craigavon Croydon Centrale Derry Dumfries Durham Edinburgh Gyle Centre Edinburgh St James Enfield Falkirk Folkestone Fulham Glasgow Braehead Hemel Hempstead Huddersfield Kirkcaldy Lancaster Leadenhall Lisburn Loughborough Luton Moorgate Newbury Newcastle Silverlink Newry Newtownabbey Orpington Redditch Rochdale Salisbury Scarborough Scunthorpe South Shields St Albans St Helens Stafford Stockton On Tees Swindon Tamworth Teesside Telford Resite Torquay Trocadero Wakefield Walsall Walton On Thames Wandsworth Warrington Watford Wellingborough Wigan Woking Wood Green Workington Wrexham Heathrow T5 Departure Level Heathrow Terminal 1 Heathrow Terminal 3 Heathrow Terminal 4 Glasgow Silverburn Belfast Boucher Camberley There were also three stores scheduled to close prior our appointment as Administrators, but closed after our appointment. Windsor Perth Chatham
Restructuring specialist would acquire about 140 stores and safeguard 2,500 jobs
There might just be life in the old dog yet: Nipper, the mascot who has peered into a gramophone in HMV shop windows for more than 90 years, appeared close to being saved in a £50m deal that will safeguard 2,500 jobs and up to 140 branches of the UK’s last major high street DVD and CD chain.
Hilco, the restructuring specialist, is expected to sign an agreement on Friday morning to acquire around 130 HMV-branded stores and nine outlets that trade under the cut-price music brand Fopp.
Major music labels and film studios are also understood to back the deal and have agreed new supply terms with HMV, according to Sky News. They are keen to keep a major distribution channel for the entertainment industries on the high street and a rival to Amazon, iTunes and UK supermarkets. HMV’s landlords are also reported to back the deal.
HMV called in administrators from Deloitte in January but hopes of a rescue deal were subsequently raised just days later when Hilco bought HMV’s £176m of debt for a reported £40m. It was announced in February that 66 of HMV’s 220 shops would close over two months, at the cost of nearly 1,000 jobs.
No one from Deloitte was available to comment. An HMV spokesman declined to comment.
The chain is expected to be run by a combination of incumbent HMV and newly appointed Hilco executives.
The HMV chain, founded in 1921 and famous for its Nipper the dog trademark, still holds a cachet for many people. HMV had about 35% of the CD market in 2012, a market that is albeit dwindling.
Prior to falling into administration, the company had 230 stores in the UK. But its business has struggled in declining markets and amid increasing competition from supermarkets and online retailers. The company had also been struggling with debts for more than two years when it called in the administrators, having been hit by a weak economy in the runup to Christmas.
Hilco, which has successfully turned around the performance of HMV’s Canadian business since buying it two years ago, also has plans to re-establish the brand in Ireland by reopening a store on Dublin’s Henry Street. The retailer’s 16 outlets in the country were closed three months ago.
The restructuring business has made millions by sucking up the assets of dying brands including Woolworths, Habitat and Borders.
Administrators claimed Hilco has a broad range of experts backed up by a strong capital base that allows them to buy up debt or stock or invest in extras, such as new IT systems, which can produce the best results.
Last year the firm was brought in to clear stock and close stores at Clinton Cards, JJB Sports and the Allders department store in Croydon.
It also advised on the administration of the fashion chain Peacocks and the closure of Micro Anvika’s electronics stores.
Supermarket group understood to have held talks with administrators following collapse of the entertainment retailer
Supermarket group Asda is eyeing up a possible bid for failed music chain HMV as the first wave of stores prepare to shut down. HMV collapsed into administration in January with more than 1,500 staff losing their jobs and a further 1,500 in the balance.
It is understood Asda has held talks with administrators from Deloitte about saving the brand rather than just converting the sites into convenience stores like Morrisons, which snapped up six sites to turn into its M local stores.
More than 100 stores across the country are set for closure in the next few weeks, with administrators keen to find a solution before the end of the month when the next rent payment is due.
Asda has little presence in the convenience store market, which is dominated by Tesco and Sainsbury’s. However, it may be looking at any potential offer as an opportunity to expand. HMV, which has debts of £170m, suffered poor Christmas sales following years of decline.
There was some hope for the company’s future after a temporary deal was struck with film studios and music labels to ensure new releases, such as the James Bond film Skyfall and Madagascar 3, continued to flow to its stores.
Negotiations with specialist investor Hilco continue after it acquired the secured debts from Royal Bank of Scotland and Lloyds Banking Group. The company had already bought HMV Canada in 2011 and has built relationships with several distributors.
Asda and Deloitte declined to comment.
Early errors muddled Fresh & Easy’s image, while shareholder impatience over on going losses proved to be too much for firm
As Tesco prepares to dump its Fresh & Easy chain it can take comfort from the knowledge it is not the first British retailer whose ambitions have broken up on the rocky shores of the US.
The move follows a litany of ill-fated forays dogged by poor preparation, heavy competition, financial difficulties and sheer arrogance. Some retailers failed because they tried to run things from the UK, were suckered into taking on expensive stores that could never be profitable, or failed to consider the different tastes, seasons or even clothes sizes of US shoppers. Others underestimated the scale of investment needed to take on such a large territory.
Tesco cannot be accused of poor preparation. The company spent two years researching the US market, even sending in a crack team of executives to investigate the contents of Americans’ fridges. It gained some knowledge of the market through a deal to provide IT for the online arm of the US retail chain Safeway.
Despite those efforts, Fresh & Easy clearly managed to get things wrong. Initial plans to open hundreds of stores within a short time-frame served by dedicated distribution centre and food “kitchen” were put on hold when it became clear the retail concept needed tweaking.
Andrew Kasoulis, an analyst at Credit Suisse, said Tesco needed 300 to 400 stores to become profitable given the costs of its dedicated support infrastructure. But getting to that size would have taken years, and vast additional investment, while Tesco was forced to tackle early errors including limited ranges with too few brands familiar to US shoppers, mistakes on health and beauty and bakery, and an attempt to take ready meals to a US public not used to such a concept.
All of those problems combined to give Fresh & Easy an unclear image that swung between upmarket and low-cost discounter, according to experts. Meanwhile competition in the region stepped up in reaction to Tesco’s arrival. Walmart hired David Wild, a former Tesco executive, to help it counter the British invasion. Aldi, the German discounter, announced plans to open stores in California, Fresh & Easy’s heartland.
Richard Hyman, a veteran retail analyst and president of the consultancy PatelMiller, said: “If a retailer goes into a market already very well serviced by good retailers, it is stacking the cards against it. They are going to have to run faster and take business from those established retailers with well-known names.”
Kasoulis said that despite many improvements to the chain, Tesco’s shareholders were clearly not prepared to give management sufficient time to find out whether it could make Fresh & Easy could work, given its ongoing losses.
As he battles to deal with problems at home, the Tesco chief executive, Phil Clarke, may have found it easier to cut and run from Fresh & Easy, which was the baby of his predecessor, Terry Leahy.
What’s more, the move has led to the departure of Fresh & Easy’s boss, Tim Mason, Tesco’s deputy chief executive, whom Clarke beat to the top job.
HMV Finally extracted itself from the US in 2004 after failing to make a profit from expensive and over-ambitious stores.
WH Smith Sold its US airport and hotel stores after the retail meltdown that followed the 9/11 terrorist attacks in 2001.
J Sainsbury Sold its upmarket grocery chain Shaw’s in 2004 after failing to expand the business sufficiently to take on the US’s biggest grocery chains.
Marks & Spencer Lost two-thirds of its investment when it sold the fashion chain Brooks Brothers in 2001. It sold its upmarket grocery chain King’s in 2006 amid difficulties at home, deciding it did not want to invest enough to expand.
Dixons sold its stake in the US electricals chain Silo in 1993, six years after acquiring it, after losses caused by over-expansion during a recession. It faced tough competition from the likes of Best Buy and Circuit City.
Laura Ashley Sold its US chain for a dollar in 1999 after over-ambitious expansion led to a string of profit warnings.
Body Shop Heavy losses at its US operations in the late 1990s took a heavy toll, forcing it to close its manufacturing operations and expand elsewhere.
Private equity arm of Lloyds acquires Jazz Cafe and Barfly in Camden, the Ritz in Manchester and Lovebox festival
HMV has sold most of its remaining live music assets, including the Jazz Cafe and Barfly in Camden, the Ritz in Manchester and the Lovebox festival, for £7.3m to the private equity arm of Lloyds Banking Group.
The home entertainment retailer has sold MAMA Group, which it took over for £46m in 2010 and also runs artist management services and owns music magazine The Fly.
As part of the deal HMV has also offloaded its 50% interest in the Mean Fiddler joint venture it held with MAMA, which it struck for £18.25m in January 2009. Mean Fiddler runs 11 venues including the Edinburgh Picture House and Birmingham Institute.
The sale – backed by LDC which is owned by Lloyds Banking Group – does not include the clubs G-A-Y and Heaven, which are subject of ongoing discussions as part of a separate deal.
LDC has backed a management buy-out led by MAMA’s chief executive Dean James. MAMA, which also runs festivals including Global Gathering and Wilderness, is aiming to grow in the UK and internationally with a “buy-and-build” strategy.
“MAMA has for some time been one of the leading live music companies in the UK and with LDC we will develop our venue and festival business to consolidate our position in this market, and will look to expand into Asia and America,” said James. “Untangling ourselves from HMV has been long and difficult process but one that has been handled with extraordinary grace and patience by all involved.”
LDC has been responsible for deals including backing former BBC1 controller Lorraine Heggessey’s Boom Pictures; the £35m buyout of digital billboard company Ocean Outdoor; and backing the management buyout of eight Midlands radio licences from Global Radio, forming the company Orion Media.
HMV said it would use the proceeds of the sale to pay down debt.
In June, HMV separately sold the Hammersmith Apollo for £32m to a consortium called Stage C. Stage C is jointly owned by Ansco Music, a subsidiary of the American magnate Philip Anschutz’s Anschutz Entertainment, and a subsidiary of CTS Eventim, a ticketing services provider, of Germany.
HMV has previously told investors that its total investment in the live music division was £62.5m.
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Nintendo’s new console is available in the UK at the end of November, but how much it will cost is still unclear
One question a lot of British gamers had after the Wii U announcements on Thursday was: well, how much is the console going to cost?
Although Nintendo provided retail prices for Japan and the US, the company’s European head, Satoru Shibata, explained during his press conference that in his region retailers would be setting their own pricing for the basic White bundle and the premium Black edition.
This, of course, goes back to 2002, when Nintendo was fined over £90m by the European Commission for colluding with suppliers to rig the prices of its consoles and games across the continent. Nintendo fought the allegations and managed to have the fine reduced several years later, but since then the firm has erred on the side of caution, allowing retailers to set their own pricing structures based on the trade cost.
“The trade cost prices of Wii U are at just over £200 for the basic unit, £245 for the premium unit and £270 for the ZombiU set,” says Christopher Dring of industry news site, MCV.
And what we’re seeing today is a range of prices, hovering at between £249.99 and £259.99 for the basic edition (which comes with the console, one GamePad and AC adaptors) and between £289.99 and £309.99 for the premium Black edition (console, GamePad, copy of NintendoLand, sensor bar, HDMI cable, Nintendo Premium membership).
There is also a ZombiU edition of the Black console, which comes with all the premium kit together with a copy of Ubisoft’s zombie game – that’s coming in at between £329.99 and £349.99.
Right now, Amazon is at the lower end, with White at £249, Black at £299 and the ZombiU Black bundle at £329 – other online retailers will hover at the same price point. HMV is pretty competitive for a high-street chain, with £249.99 for White basic, £299.99 for Black and £329.99 for the ZombiU pack. Game is at the upper end on £259.99 for the basic pack, £309.99 for the premium and £349.99 for the ZombiU bundle.
The big question is whether the big supermarkets will start trying to undercut each other on price. Chains such as Tesco and Asda will often sell big games like Call of Duty at cost or even at a loss to encourage shoppers into their stores, tying the prices in with minimum grocery spends. Will they follow a similar tactic on hardware?
“It will largely depend on the stock level,” says Dring. “3DS prices were cut quite severely when it launched, but there were quite a number of consoles in the channel so the big supermarkets and online retailers – Amazon, Tesco, Asda, etc – felt capable of going low on the price. Whether Wii U gets similar cuts will largely depend on how many consoles Nintendo will make available. Personally, I’d be surprised if there will be severe discounting pre-Christmas. Although perhaps £10 here or there.”
Potential buyers should also look out for special retailer bundles. Independent stores and smaller chains unable to compete on price will often create their own packs, complete with additional games, controllers or leads. It’s worth keeping an eye on your nearest indie stores, or checking the local press.
And now we know the price point, how is the console likely to fair? “I expect the Wii U to conduct brisk business over Christmas and into the new year due to pent-up demand from the original Wii evangelists,” says Piers Harding-Rolls, senior principle analyst with IHS Screen Digest. “However, this is a significant premium on the original Wii, so more casual buyers that come to the product after the launch phase will need to be impressed with tons of value in content and services to take the plunge.”
IHS Screen Digest has estimated that global sales will be around 2.5m by the end of the year. As for the stores themselves: “I think retailer expectation for the Wii U will be realistic considering the general economic backdrop and competition from other consumer devices, such as new iPods, tablets, smartphones and handheld games consoles. But there will also be an awareness that the product is likely to sell well to early adopters over the Christmas sales season, so this Wii U launch period is an opportunity to push through some significant business if executed correctly.”
Retailers certainly need a hit. Sales at Game have been falling this year as consumers begin to tire of the current generation consoles, which have been around for over six years. A new console release can energise the whole market. Game and HMV will be thinking of ways to get interested customers into stores, such as fitting demo units and holding special events.
It’s likely that demand will outstrip initial supply, however, so pre-ordering may be a good idea. If a Wii U crops up on your child’s (or partner’s) Christmas list this year, it’s probably better not to wait until 24 December before legging it around every game store and supermarket in the area.
He innovated bravely at struggling HMV, but his efforts there have stalled. It’s hard to see why the markets are so enthused about his arrival at Trinity Mirror
While Sly Bailey was in charge of Trinity Mirror, its shares slid 90%. While her freshly promulgated successor, Simon Fox, was in charge of HMV, its shares fell 98%. Yet Fox’s appointment is greeted with enthusiasm on the exchanges. Trinity shares promptly rise 5%. Discuss – or rather, scratch your head.
Maybe the hope of innovative thinking is what it’s about. Sly wasn’t an innovator: she simply cut costs and then ran out of road. But for easy riders on the City carousel, Fox looks rather more interesting – probably because the industry parallels seem so pat.
Take a business losing 10% of its sales year after year. The recession is hurting, but it’s digital that brings the most relentless pain. Simply, the wonders of online are killing your basic products: CDs, DVDs and books. Do you just sit there and shut more shops? Or do you try to reinvent yourself as a broader entertainment brand – selling tickets, owning venues and clubs, running festivals, managing musicians – and go determinedly digital yourself?
We could, in crude outline, be talking about the dilemma of any big newspaper operation (and Fox has been a non-exec at Guardian Media Group for two years). The hope is that he can give Trinity Mirror the kiss of life he sought to bring to HMV. But the parallels don’t stop there. Why has what appeared to be a promising way forward stalled, with all those venues and Waterstones sold off, and engines of transformation put on hold? Because profits have shrunk; because sales are down 20%; because HMV’s debt meant something desperate – like asking suppliers to invest – had to be done.
Ah! we could be talking papers again, as print advertising slumps faster than digital grows and pension-fund overhangs increase. Fox will need to get very innovative indeed. But broad brushes will also need to get more discriminating. How much is Trinity’s gloom, especially at national level, exacerbated by years of inert non-investment? Are DVDs and words on paper utterly comparable? Fox didn’t think so when he talked about books. “Unlike music, the book is not a broken product: the book is a fabulous product,” he once declared (before selling Waterstones).
And discrimination also means taking fashionable assumptions case by case. Look at the plight of the regional press Fox now joins. Year-on-year circulation drops of 10% are common in the latest six-monthly ABC figures. But there’s still a research project lurking amid so much gloom. Take the Exmouth Herald and the Goole Courier. Ponder the Alloa Advertiser, the Coalville Mail and the Bucks Free Press. These are just some of the titles that kept losses under 3%. Some, indeed, finished more or less even over a brutal 12 months. Many made decent money. They must be doing something right. As so many local weeklies cry woe and the end of their world, it would be nice to know precisely what: and Simon Fox, as outsider, will need to be very interested in that, too.
? Lord Justice Leveson sprays a “confidential” 118-page letter of early criticisms around Fleet Street (in the process of limbering up for his report). The editor of the Independent describes it as a “diatribe”, a “completely one-sided” attack that resembles “loading a gun”. Another, unnamed, executive calls it “excoriating”.
Well, we shall see if fairness and balance follow in a separate envelope; but meanwhile LJL is described as “disappointed” that his comments “are being openly discussed in the press”. Which, alas, is just another indication that, after 10 months of listening, he still doesn’t quite get it. Send a secret diatribe to every editor and what do you expect? Just “disappointment” if it doesn’t leak instantly.