HMV Group, the high street music retailer, is planning a major overhaul of its business including new store formats and a major push behind its online sales as part of a three-year plan to revitalise the business.
The retailer, which also owns the Waterstone’s brand, is planning to trial a new HMV store format from autumn this year and will also launch a social networking site for music, film and gaming fans which it hopes will develop new advertising revenue streams as well as sponsorship and paid-for content opportunities. It has signed content deals with Universal Music and 20th Century Fox and will partner mobile network 3 to provide content to its subscribers
It is also planning to boost marketing for the HMV and Waterstone’s websites and forecasts that 20% of sales from HMV and 9% of sales for Waterstone’s will come through the respective websites by 2010.
Simon Fox, HMV chief executive, says it has carried out a “comprehensive review” of the business and he admits that both chains have failed to adapt to the changes in consumer buying habits.
Other plans for HMV include ramping up its range of portable products from brands such as Apple, Sony and Samsung and a new loyalty card for both HMV and Waterstone’s that will be rolled out over the course of the next year.
The group issued a profits warning as it outlined its plans, which it claims will make £40m in cost savings over the next two to three years. Sales at HMV are inline with expectations but there has been a decline in its overseas operations and Waterstone’s.