Entertainment brand HMV making comeback through Toys “R” Us locations

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This article was published 01/02/2024 (995 days ago), so information in it may no longer be current.

TORONTO – A blast from the past is coming to Toys “R” Us Canada.

HMV, the entertainment brand that departed the country seven years ago, said this week that it has begun selling merchandise in five of the toy retailer’s Ontario locations. The rollout will continue across other Toys “R” Us Canada stores this spring, it said.

Products for sale in the HMV-branded sections include CDs, DVDs, vinyl, record players and other collector items like T-shirts and books.

The move, which marks HMV’s return to the Canadian market, is being positioned by Toys “R” Us Canada as a way to appease consumer demand for pop culture, collectible and nostalgic merchandise.

David Soberman, a marketing professor at the University of Toronto, said that reviving HMV’s brand this way is “an interesting idea” that takes advantage of current retail trends.

“There is renewed interest in vinyl and people still like crazy are collecting items related to music, which fit with the HMV brand,” he said in an interview on Thursday.

The HMV products being stocked have long featured heavily in the playbook used by Putman Investments, an Ancaster, Ont.-based business which owns HMV, Toys “R” Us Canada, Sunrise Records, Everest Toys, FYE, T. Kettle and Rooms + Spaces.

Putman got ahold of the HMV brand in February 2019, when his Sunrise Records and Entertainment Limited bought 100 HMV stores across the U.K.

At the time, owner Doug Putman told The Canadian Press that it is “unlikely, but definitely possible” that he would resurrect the brand in Canada, where 102 HMV stores were shuttered in 2017.

He planned to leverage his roots in the toy business by focusing HMV’s U.K. offerings on fan-based merchandise, including board games, toys and licensed T-shirts.

Putman later purchased Toys “R” Us and Babies “R” Us Canada in August 2021 from Fairfax Financial Holdings Ltd., which had nabbed the retailer for $300 million in 2018 when its U.S. parent filed for bankruptcy protection.

While blending Toys “R” Us and HMV might feel like a natural fit for Putman, Soberman said their typical customers don’t always overlap.

“Most people that would go into a Toys “R” Us store probably wouldn’t be looking to buy music or music-related items,” he said.

“Most parents with smaller kids now are probably not that familiar with vinyl.”

And even those who are aware of or interested in that might not be looking to shell out for it right now.

High interest rates and inflation are rankling customers and making some think twice about discretionary purchases.

A fall survey from consulting firm KPMG found 83 per cent of the 1,507 Canadians questioned were being more cautious about what they spent money on.

Seventy per cent of those surveyed said they didn’t plan on spending as much on discretionary items such as travel, apparel, electronics, entertainment, toys, and restaurants as they did in previous years. Meanwhile, 66 per cent indicated they plan to only spend on essential goods such as groceries, personal care products and prescriptions this year.

At the same time, thetoy sector has grappled with the rise of giants like Amazon, a slow recovery from the COVID-19 pandemic, more interest in second-hand goods and a shift toward digital and experiential gifts.

The entertainment industry has seen streaming services reign supreme, pushing many to eschew buying physical copies of films, television shows and albums.

Vinyl, however, has been a bright spot. Sales of records have risen in recent years, pushing several retailers including Indigo Books & Music to highlight the category more prominently.

Though the product mix is different between Toys “R” Us and HMV, “there should be minimal cannibalization of each other’s sales and they will complement each other,” said Joanne McNeish, an associate professor at Toronto Metropolitan University specializing in marketing.

“This a good way for Toys “R” Us to maximize its floor space and add a new revenue stream,” she said in an email.

“This is low risk way to introduce HMV back into the Canadian marketplace.”

This report by The Canadian Press was first published Feb. 1, 2023.