HMV boss falls on sword

I'M NOT MUCH of a Christmas shopper. But when I was wandering around the local shopping centre with the kids they did succeed in dragging me into HMV to peruse a few discs.

But the queue in the shop stretched virtually to the back wall, so we dropped our potential purchases and headed elsewhere.

Now we hear that the boss of HMV, Alan Giles, has quit, blaming online music stores and the supermarkets for his ex-firm's poor performance during the annual Yuletide celebration of capitalism.

Now, not only has HMV an online presence, it also operates on the same globe as everyone else. So while Giles may blame the competition for his departure, his falling on his sword may be better interpreted as an acknowledgement that, while the world changed around it, HMV stood still.

Too late now, Mr. Giles, but maybe a few extra staff in your outlets would've helped.

“This is a brave new world for retailers," said Giles on his departure. A world, he confessed, he'd misjudged.

In particular, Giles pointed at supermarket giants Tesco and Asda as aggressive wagers of a price war in which HMV failed to compete.

These two - amongst others - have a particular scam operating in the UK whereby they sell CDs direct from outlets established in the Channel Islands. Goods brought to mainland Britain from the Channel Islands are not subject to VAT if they cost less than £18.

Somehow, neither applies a delivery charge to these purchases. A quick wibble around the web shows Asda charging £8.97 for Madonna's latest album. It's £8.95 at Tesco Jersey. HMV's online store also happens to be in the Channel Islands - on Guernsey. Confessions On A Dancefloor costs £8.99 there.

So, if times are tough for HMV, you can imagine how smaller retailers are struggling.

One of the few campaigners fighting to close this loophole is the Forum of Private Business. As the FPB's Chief Executive Nick Goulding put it: "It is totally unacceptable, unfair and anti-competitive that a business like Tesco which has a turnover of £34bn should gain a competitive advantage over tax-paying small businesses by avoiding tax." µ

L'Inqs
FPB campaign
Tesco Jersey
HMV Guernsey