From this article on the <a href=”https://dave.shakenmartini.net/serendipity/exit.php?url_id=293&amp;entry_id=187″ title=”http://smh.com.au/news/technology/hmv-boss-quits-after-internet-savages-sales/2006/01/13/1137118966705.html” onmouseover=”window.status=’http://smh.com.au/news/technology/hmv-boss-quits-after-internet-savages-sales/2006/01/13/1137118966705.html’;return true;” onmouseout=”window.status=”;return true;”>SMH</a>:<br />
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THE internet shopping revolution claimed its first big high-street retail scalp when the boss of HMV music store and Waterstone’s bookshops quit as the group blamed the combined power of online retailers and the supermarkets for plummeting sales.<br />
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Alan Giles resigned after unveiling the worst Christmas trading figures of any big UK retailer so far. He said there had been “a quantum jump” in online sales in recent months and the supermarkets had again lowered prices.<br />
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The rise in popularity of music downloads has also undermined traditional music retail.<br />
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HMV’s 200 music stores in Britain, which date back to 1921, slumped £300,000 ($700,000) into the red in the October half. In the same period in 2004 they made a profit of £13.5 million.<br />
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Underlying sales fell 12 per cent. Over Christmas, when HMV makes 90 per cent of its profits, the sales decline slowed, but it was still nearly 9 per cent.<br />
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Mr Giles initially dismissed downloading as posing little threat to his business. When the pirate site Napster emerged he insisted it was not much different from teenagers borrowing albums to tape in the 1970s. It would, he said, give them a love of music which would ultimately translate into higher CD sales.<br />
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“A year ago I was saying the internet would plateau at about 10 per cent of this market,” Mr Giles admitted on Thursday. “Now I say that I was wrong. I just don’t know now how far it will go. This is a brave new world for retailers.”<br />
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He said he wanted a career change and did not intend to take another full-time job.<br />
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HMV has been widely criticised for failing to embrace the internet early enough. It launched a download site only late last year and, while its Guernsey-based online store is growing fast, it is smaller than one of the chain’s stores in Oxford Street, London.<br />
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The chain has been battered by the supermarkets, which now dominate sales of chart CDs and bestselling books by selling large volumes at low prices.<br />
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At first HMV held its own by concentrating on back-catalogue ranges the grocers do not stock. But online retailers such as Amazon and Play.com have started doing that too.<br />
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Stuart Rowe, managing director of Play.com, said the internet was now the mass market.<br />
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Play.com, the No.2 online entertainment retailer after Amazon, had a strong Christmas. Sales of music rose 37 per cent, DVDs 8 per cent and video games 50 per cent.