'I don't want to hear coffee shop': HMV's Doug Putman talks retail strategy at ERA AGM

'I don't want to hear coffee shop': HMV's Doug Putman talks retail strategy at ERA AGM

HMV's new owner Doug Putman's ERA keynote was billed as the big draw at this year's AGM, which was standing room only at Dolby in London's Soho.

There was plenty of familiar ground for Music Week readers, from depth of vinyl catalogue to supplier relations. 

It was a well-received appearance by the Canadian retail entertainment mogul. When he confirmed profitability for the chain in 2019, there was a round of applause from the audience. 

The Sunrise Records CEO revealed his initial message to staff about ideas to revive HMV - "I don't want to hear coffee shop" - and gave an update on the first six months. 

Putman revealed that the bill for its new vinyl units across 115 stores - first revealed in Music Week - topped £1 million. "It gives a different feel to the stores right off the bat," he said

That investment underlined the long-term plans for HMV. In his Music Week cover story earlier this year, Putman predicted that the retailer will never go out of business. In Canada, Sunrise's sales are flat in a physical market that's down 20% overall.

"Anything I buy is long term, I wouldn't buy something to have it three or five years," he said. "Do I think long term the chain's 115 stores? Yeah, I do."

But HMV still needs to do better and liven up its stores, according to Putman.

"They are still a bit boring, a bit corporate, they need to be more fun," he said. "We are in the entertainment business, it should be a blast when you're in there."

We are in the entertainment business, it should be a blast when you're in HMV

Doug Putman

He also acknowledged mistakes that resulted in a delayed relaunch for the online store, which is now up and running again.

Putman highlighted the success of innovative physical releases from K-Pop acts such as BTS and Taylor Swift, whose new album Lover was released in multiple deluxe editions. 

"Price is not the most important thing, it's value," Putman told the AGM. "Taylor Swift is a good example, we have customers buying five versions of the same thing. The reason your buying that Taylor Swift [album] is you want to feel that much closer to the artist."

Rents have come down, which suggests that Putman acquired the business at the right time. But he reiterated the complaints of onerous business rates that former owner Hilco made after HMV went into administration.

"At some point something's got to change, government can't make more than me, the landlord and our suppliers on a store," he said. "I'm hopeful we'll see those rates dropping." 

There was an indication that the share of music in the mix is edging up, with the sales breakdown including 15% vinyl and around 20-25% CD, a reminder that the latter is still dominant.

"Vinyl always gets reported on because it's 'hot' right now," noted Putman.

The biggest revelation of the day was Putman's plans for a new UK retail brand - working title Cherrybomb - that will launch around Christmas. The stores will specialise in licensed apparel and collectibles, which suggests merch opportunities for the music industry. 

"If it works, we'll continue to expand it in 2020," said Putman.

HMV is also growing with the launch of a huge new store in Birmingham.

"We like retail, we'll continue to open up businesses," said Putman.

"I fully believe bricks-and-mortar retail sticks around. I can't believe there's a world just with Amazon."

Of course, Amazon were in the room as ERA represents the whole range of entertainment retail, from physical to digital.

ERA CEO Kim Bayley noted the continued growth for the sector.

But there were calls for labels to facilitate more licensing solutions to enable the streaming sector to grow and avoid "stagnation". 

ERA chair James Morton said that the music industry couldn't afford to rely on the existing models and needed to allow innovation, like the gaming sector.

"The music industry is buoyant right now," he said. "They deserve a good time as much as anyone, but it can't be a one-way street."

"In a fast-moving business like ours, we can't afford to stand still," added Bayley.

During the AGM, the elections to the ERA board saw HMV head of music John Hirst join for the first time. James Cooke (Sainsburys Argos), Tom Papps (Sky Store) and independents Ashlie Green (David’s Music) and Alan Jordan (Reflex) were all re-elected.

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