Wolffe Follows Fox Out The Door
HMV finance director David Wolffe has said he’s leaving the troubled retail giant, just days after chief exec Simon Fox quit.
A company statement said Wolffe, who joined HMV from ITV Studios in January 2011, “will remain with the company until a successor is appointed to ensure a smooth handover.”
Fox, who resigned his position at the beginning of the month, was immediately replaced by Trevor Moore, the former chief exec of photography chain Jessops, who also has a reputation for turning struggling companies around.
Moore ran Jessops for three years following its was rescue from administration by HSBC, when the bank did a debt-for-equity swap.
He’s turned the business around and – like Fox at HMV – has improved its relationship with suppliers, which include camera giants such as Nikon and Canon.
Fox’s six-year battle to transform the CD and DVD seller into a 360-degree music company has left HMV anchored by debt, forcing it to sell off some of the acquisitions made while implementing his strategy.
The underlying problem for HMV, which has over 200 stores in the UK, is that the recession, illegal downloading and online and supermarket competition have eaten away at its core business.
In April it reported that Q1 year-on-year sales were down 12.2 percent, while business analysts reckon it’s on target to lose £16 million this year.
The demise of rival home entertainment giant Game left HMV as the last remaining national chain, enabling Fox to cut better deals with its suppliers. He also renegotiated better loan terms with the company’s bankers, although at times that has involved making disbursements in order to cut the debt.
“I am proud to be leaving HMV with a profitable future secured”, said Fox, who in May predicted the company would make £10 million profit next year.
Fox is reportedly entitled to a payoff of up to a year’s basic salary of £499,000, but that could reduce if he finds a new job in that time. Two years ago Fox turned down the chance to run ITV.
In June HMV hived off London’s Hammersmith Apollo, which it acquired in 2010 as part of the Mama Group, to a partnership between AEG and German ticketing giant CTS Eventim.
It’s reportedly in talks to sell its other 13 music venues and its UK festival portfolio, the remainder of what was Mama Group, to any of a number of potential buyers.
The plan is to get back the £65 million that HMV paid for Mama. The package includes London rooms such as the HMV Forum, Heaven, The Garage , Barfly Camden, Jazz Café and The Borderline, and regional venues including Manchester’s HMV Ritz, Edinburgh’s HMV Picture House, and the HMV Institute in Birmingham. The festivals include Lovebox, The Great Escape, Wilderness, Vintage and Global Gathering, which are all in the UK.
Many of the UK’s business papers reckon the likely buyer is a consortium led by former Mama Group co-founder and chief exec Dean James, who moved to HMV when it bought the company.