MusicMSc HMV Project

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January 2011

- 60 stores set to close
- Christmas sales down 10%
- Shares dropped 20%
- 40 HMV and 20 Waterstones stores to close
- £10m savings to be found

Reasons:
1. core product of music and dvd falling faster than expected.
2. snow not the main issue
3. consumer market as a whole is weak

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Current business model

- music
- dvd
- games
- hmv lite
- digital download
- venue management
- festival promotion
- cinemas
- clothing
- book trade
- 3yr strategy expected to raise £15m profit through venues (Hammersmith Apollo and HMV Forum - was Kentish Town Forum)
- Expected 12% profit to come from technology and clothing 9%

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Main Problems

- competition online
- imports for Channel islands VAT free
- growth of supermarket power and margins cut
- too wide a range of merchandise

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- Pez