What brands need to survive in a digital world

IN EARLY 2013, HMV - best-known as a bricks-and-mortar purveyor of CDs and DVDs - appeared to be a clear-cut victim of digital disruption. Debts totalling £347 million had driven the company to the edge of the abyss, endangering more than 4,000 British jobs. As one researcher noted at the time: "In the digital era where 73.4 per cent of music and film are downloaded or bought online, HMV's business model has simply become increasingly irrelevant and unsustainable."

Two years later, not only is HMV still standing but it also has been able to turn a profit from all 140 remaining UK outlets. Recently, it edged out Amazon to become the UK's leading physical music retailer. HMV's return from the brink can largely be credited to cost-cutting measures by restructuring firm Hilco Capital, which bought the company after it entered administration.

But trimming the fat is only part of the story behind this unlikely turnaround. In addition to capitalising on the vinyl renaissance, HMV has drawn in UK customers with more than 500 in-store signings and performances. In Canada, where the chain maintains more than 100 stores, HMV has outlived its competitors by diversifying its wares to include entertainment-themed collectibles and apparel.