In light of UK Music Retail Giant HMV’s continued plans to ‘restructure’ including expected 1500 job cuts and the closing of 60-100 stores, as well as last year’s Allans Billy Hyde receivership debacle, Australian department store David Jones has announced it will quit selling consumer products such as music, DVDs, and videogames, as reported by News Ltd, dealing another blow to the music retail industry in general.
Following a poor Christmas for DJs with their total sales for the three months leading up to January 26 having fallen 1.4 per cent to $590.1 million, CEO Paul Zahra has decided to close up shop for homewares such as music and electronics which “continued to be challenging and subject to ongoing deflationary pressure.”
This move is in accordance with plans to reshape David Jones’ line of products and “change [their] category mix to increase focus on higher margin categories,” explains Zahra, such as their fashion and beauty categories “which delivered sales growth in [the] second quarter of 2013 and and first half of 2013”.
With music being the ugly and poor cousin to fashion and beauty, lagging homeware losses have been subsequently cut.
The financial crisis of the past years have hit hard at giant retailers of music with the Christmas period providing no relief, only confirmation of these difficult times.
Christmas sales figures for the department retailer have steadily going down over the usually busy sales period, with total sales for the six months to January 26 falling 0.7 per cent to $1 billion. Homewares, including music, being its worst selling category.
With music being the ugly and poor cousin to fashion and beauty, lagging homeware losses have been subsequently cut.Efforts to boost sales during Christmas was a tactic also employed by HMV, who attempted this January with a month-long sale, which only proved to derail the company into its harsh restructure, as its value plummeted to £5 million (approx $AU 7.6 m) by the end of January.
Online shopping, and growing popularity of digital music streaming only compound the hardships faced by retailers in the GFC. The digital streaming industry, having racked around $1 Billion dollars last year, impact not just the sale of CDs and DVDs but related devices such as CD/DVD players and other music electronics.
Allans Billy Hyde’s receivership also increased fears for music retail late last year, which saw not just tough employability conditions but consumerist ones as well, with pre-purchased gift vouchers and refunds being declined, reinforcing the growing trend of online shopping and its impact on music chain stores.
However, the son of the late Billy Hyde, Garry, continued his father’s legacy under the name GH Music proves to be a fortunate anomaly where good things come when the family name and money come into play. Hyde believing that in the current economic climate there is still “room for a family owned music business.”
According to its website, GH Music is celebrating its opening with the ‘Huge Day Out’ on Saturday 23rd February, with free in-store music performances from the likes of Stonefield, The Electrique Birds, and The Pancis’ Jae Laffer. As well as a meet & greet with The Living End drummer, Andy Strachan and – ironically – ‘A David Jones Experience’ headlining as special guest.
For the department store David Jones’ case, their exit as a music retailer seems an inevitable symptom of a dismal economy and a changing market, where simply high selling categories are pushing out the low-performing ones.
