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HMV gains new lease of life from soaring vinyl record sales

Published: 13:12 16 Jan 2023 GMT

HMV
HMV has seen a resurgence since it refocussed on vinyl records in 2019

HMV has become a key beneficiary of the recent boom in vinyl record sales, reporting its highest profit since it was bought out of administration in 2019 and set its sights on the retro music market.

Revenue grew 66.8% to £150.8mln in the year to May 2022, alongside a gross profit increase of 64% to £65.4mln, according to accounts filings.

In turn, HMV saw its operating profit hit £2mln.

HMV has largely benefitted from the resurgence of vinyl record sales, which surpassed CD sales for the first time since 1987 last year, following their introduction earlier that decade.

Referencing the decline in consumer confidence over high inflation rates and recession fears, HMV outlined it was “offering products with sufficient exclusivity” to manage this and to boost the likelihood of customers specifically visiting its stores.

Across the sector, vinyl albums generated sales of £150.5mln last year, up 11% on 2021, compared to £124mln from CDs, which saw sales value fall some 17.4%, said the Digital Entertainment and Retail Association (ERA).

A re-emergence of vinyl records in the music industry has also paved the way for new companies hoping to take advantage of the growth.

One of these, Middlesborough-based start-up Press On Vinyl, said on Monday it aimed to double production this year, from an original target of 50,000 records a month when it set up in early 2022.

Streaming was still a top pick for listeners last year though, with physical music sales worth £280.4mln out of a total of £1.97bn seen across the UK’s music industry.

“Thanks to the investment and ingenuity of streaming services on the one hand and to the physical retailers who have driven the vinyl revival on the other, music is within sight of exceeding £2bn in retail sales value for the first time in more than two decades,” commented ERA chief executive Kim Bayley.

Sunrise Records’ C$1.5mln buyout of HMV in 2019 saw 27 stores close their doors, while 100 stayed open, and followed a previous rescue attempted by Hilco in 2013.

Now operating from 114 stores, HMV said it would "continue the focused expansion building on the brand and diversified growth."

Sunrise and HMV owner Doug Putman added: “Vinyl has enjoyed an ongoing revival, and many of the world’s biggest music artists now make vinyl a key part of their new album promotions,” suggesting HMV's stronger year was largely thanks to this.

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