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Not The Day The Music Died

Thanks to Lando at House of James for sending us this article about how HMV and Sunrise are handling the declining sales in physical music sales. Turns out they’re handling it with great optimism, and after cutting back from 28 to 14 stores, Sunrise is now planning to open new locations. HMV is betting that the strong appetite for physical CD sales will continue, even as they increase their presence in the digital market.

HMV generates about 50 per cent of its sales from movies and 30 per cent from music. Sales of related items like clothing and collectibles, which currently make up about 20 per cent of sales, will rise to about 35 per cent of overall revenue in 2014 as movies and music sales drift lower…

The company has improved profit margins by working closely with suppliers, scaling back its permanent real estate portfolio, and dropping low-margin video games and tech products while shifting to items such as T-shirts.

But as HMV rushes to become the go-to entertainment retailer, it risks getting caught in the crosshairs of discount players – another one, U.S.-based Target Corp., arrives next year.

Read more at The Globe and Mail. If you see an article readers here would appreciate, be sure to send it.

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