HMV has decided to pause its UK store expansion plans due to upcoming tax increases, citing financial risks.
- The company’s owner, Doug Putman, expressed concerns over the potential £5m loss in annual investment as a result of these changes.
- Putman, who revived HMV in 2019, noted that the risks associated with opening new stores have become too significant.
- The decision could have additional repercussions, including potential job cuts within the company.
- The retail sector faces challenges with increased national insurance contributions impacting staffing decisions.
HMV has postponed its plans to open new stores across the UK, citing concerns over proposed tax hikes. The company’s owner, Doug Putman, mentioned that the financial risks have become too great due to these impending changes. He highlighted the potential loss of up to £5m in annual investment, a significant setback for the firm.
In an interview with The Telegraph, Doug Putman shared that while HMV initially aimed to open five to ten new stores each year, these plans are now on hold. He attributed this decision directly to the national Budget, expressing reservations about the associated risks of store openings in the current economic climate. According to Putman, “The cost to do it now and the risk that you take for every store has just become that much greater, so that in a lot of cases it’s not worth the risk.”
Putman’s leadership since 2019 has seen the revival of HMV, but the recent announcement raises concerns about the future. The decision to pause expansion aligns with a broader industry sentiment of caution amid economic uncertainty.
Additionally, the company has warned of potential job cuts following the Chancellor’s decision to increase employers’ national insurance contributions. Putman noted that retail companies, including HMV, traditionally hire extra staff for the Christmas period and often retain some permanently. However, this year, the industry may not sustain the same level of employment due to these financial pressures.
These developments underscore the challenging landscape faced by the retail sector, as businesses grapple with fiscal policy changes that affect operational decisions and workforce management.
HMV’s cautious approach reflects broader retail industry concerns amid economic shifts.
