Doug Putman is calling on ministers to introduce an online sales tax aimed at tech giants such as Amazon. Photo: Heathcliff O'Malley
The Canadian tycoon who saved HMV has criticized the chancellor for “punishing” retailers with tax rises as he said higher business rates could limit the chain's expansion plans.
Doug Putman, who bought the music retailer Jeremy Hunt's decision to raise business rates in line with inflation risks damaging efforts to revive Britain's ailing high streets, according to Jeremy Hunt, who left the administration in 2019.
He said: “If you're trying to get more businesses on the high street, you need to incentivize them. If you continue to punish and penalize, you will get exactly the opposite result.”
While smaller retailers and hospitality firms benefited from the relief package in last week's Autumn Statement, larger retailers will face a surge next April accounts at business rates.
Putman, who has pledged to open up to 70 new HMV stores in the city in 2021. two years, says he is now less enthusiastic about building new sites.
“I don't think we'll open many stores next year,” he says. “There is nothing that would motivate me to do this. So unless something changes, we will be cautious.”
One of the changes he is calling on ministers is to introduce an online sales tax, specifically targeting tech giants such as Amazon, “rather than consistently penalizing brick-and-mortar retailers, as was done again in the autumn statement.”
“Why aren’t you looking at Amazon?” he is asking. “Because the truth is that the online war is over. Everyone lost, Amazon won.
“If they're trying to balance budgets and get more money, I don't think the solution will require more from a group of businesses that are already suffering.”
In 2021, Putman has pledged to open up to 70 new HMV stores within two years. Photo: Heathcliff O'Malley
Whether HMV is suffering, however, is another matter. Last week, Putman reopened the company's London flagship store on Oxford Street after a four-year hiatus.
Opening of a 10,500 sq.m. store. ft is a highly symbolic milestone for the resurgent HMV, as it was previously home to its first and oldest store, which opened in 1921 but closed in 2019 when HMV went into administration.
“I’d love to.” do it when bankruptcy occurs,” Putman says. “But rates and rents just didn't make it possible.”
Its opening comes amid major efforts to revitalize Oxford Street, which has been plagued by empty shops and high crime rates in recent years.
Until Putman reclaimed it, the HMV site was home to one of the many American-style sweet shops that became a mainstay of Oxford Street and synonymous with its troubles.
“It’s still an iconic street, despite the sweet shops,” says Putman. “But you need to have a lot of retailers. You need Waterstones, you need HMV, you need clothes, you need a wide range of things. You need a candy store. But do you need 10? No.”
Raised in Ontario, Canada, Putman reportedly became a billionaire at just 39 years old. He owns Toys R Us and the Sunrise Records chain in Canada.
By his own admission, he is not a well-known figure in City circles, although this did not stop him from turning over a retailer that few people know. thought to survive the rise of streaming and digital music.
In 2018, HMV succumbed to the pressure of falling DVD and CD sales, forcing bosses to call in administrators for the second time in six years.
It was at this point that Putman took his chance and bought HMV for £883,000, retaining 100 stores and around 1,600 jobs, while seeing off competition from Sports Direct tycoon Mike Ashley.
He quickly set about rebuilding . – focusing HMV on vinyl and pop culture merchandise such as T-shirts and collectible figures. After a slump during the pandemic, HMV returned to profit in 2022 as sales almost doubled, rising from £90 million to £150 million.
The new HMV store on Oxford Street will stock around 8,000 vinyl albums, 12,000 CDs and more than 4,000 franchise products. Photo: Heathcliff O'Malley
“Before the bankruptcy, everyone could see that vinyl was growing every year and that HMV should dominate it,” says Putman. “But they weren’t dominant at the time. If you look at HMV today, HMV dominates vinyl.”
The new Oxford Street store will stock approximately 8,000 vinyl albums, 12,000 CDs and more than 4,000 merchandise from franchises such as Pokémon, Star Wars, Marvel and DC, as well as 750 different T-shirts.
By Putman's words. : “We’ve never had more access to artists, whether it’s through TikTok or Instagram.
” So, as a fan of an artist, how do you get that extra connection? It's buying every version of their album, buying a CD, buying a T-shirt – it's all included in the price.”
Streaming services like Spotify have changed the way people consume music, but it hasn't been the death knell for retailers like HMV.
“When you needed to download music and you paid $1 per song, that’s where it all started,” he says. “But streaming is cheaper than downloading. You pay a monthly fee and listen as much as you want. In many cases, this frees up money that people can spend on other things.”
Surprisingly, CD sales are also growing after years of decline. “It’s the craziest thing,” he says. “People may have thought, 'I can't afford a vinyl album, but I'll buy a CD because it's so much cheaper.'” However, like many major retailers, Putman says that HMV has been hit by a record number of shoplifters this year.
“We have never had so many incidents with customers, both verbal and physical,” he says. “In the entire history of the company, we have never had such a number of thefts. And we have never had such inaction [on the part of the police].”
This has forced HMV to invest in additional cameras and security systems, as well as training staff to combat shoplifting.
Putman says theft costs HMV “millions and millions” of pounds, but points out that crime in its stores is not fueled by the cost of living crisis.
“If I had to feed my children and I couldn't feed, I wouldn’t do much,” he says. “But you don’t see it. You don't come to HMV to steal vinyl because you won't be able to feed your child.”
However, despite the threat of high taxes and soaring crime rates, Putman is confident of HMV's continued success.
“I think people were surprised that we were able to turn things around and make it profitable,” he says. “We were not”.
Despite this, attempts to expand further by rescuing collapsed discounter Wilko in the summer were thwarted, effectively leading to the closure of more than 200 stores.
He claims his deal has fallen apart for the last time. an obstacle because suppliers were trying to “hold the business hostage” by demanding inflated fees.
“The overly greedy giant companies, frankly, don't care,” he says. “The chain could have been saved.”
Wilko eventually collapsed and parts of the retailer's assets were sold to rivals such as B&M, Poundland and The Range, which is currently reopening several stores. stores under the Wilko brand.
It was a “painful” if rare defeat for Putman on the UK high street, and while he admits it was a “successful defeat”, he has no regrets.< /p>
“We are 100% done with the deal,” he says. “We could have saved it and saved 10,000 jobs.”
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