HMV to leave Oxford Street flagship over proposed rent rise

What happened

HMV will leave its flagship shop at 363 Oxford Street in March 2027 after deciding that the cost of remaining at the London address could not be justified. The entertainment retailer attributes the decision to a proposed rent increase and the expense of renovation work.

The company says its landlords want to double the rent. It also faces a sizeable renovation bill, bringing a second property cost into its assessment of whether the shop can continue operating economically. HMV considers the combined burden too great to sustain the business there.

More than 50 employees are affected. The retailer intends to seek alternative roles for them rather than treat the closure as an automatic loss of every job at the site. Its two other London shops and its head office are potential destinations.

The decision comes roughly three years after HMV returned to the premises in November 2023. That reopening restored the retailer to the address where it began trading more than a century earlier, giving this branch a particular place in the company's history.

HMV is now searching for another flagship location in the West End. It intends to retain a substantial London operation, making the planned departure a change of premises rather than a withdrawal from the capital.

The background

The Oxford Street shop originally opened in 1921. Over its long history, it became a venue for performances and signing events as well as a place to buy music, hosting artists including Sir Paul McCartney and David Bowie.

Its previous closure came in 2019, when HMV entered administration. Canadian businessman Doug Putman rescued the chain from insolvency; his retail interests also include Toys R Us. The Oxford Street address remained outside HMV's estate for four years before its return.

An agreement with the landlords enabled the 2023 reopening. That property deal was therefore central to restoring the historic branch, just as the proposed cost of occupying the building now sits at the centre of the decision to leave it.

The wider business has benefited from renewed demand for CDs and vinyl records in recent years. That recovery followed a period in which online music streaming had challenged HMV's business, changing how listeners accessed recordings and weakening the position of traditional physical music retail.

HMV's operation extends beyond shops carrying its own name. Its UK estate includes six Fopp branches, while it also has eight stores elsewhere in Europe. The group continues to describe physical shops as an important part of its business.

The closure also comes against a background of rising sales. HMV recorded growth of 15% over the first nine months of the year, so the Oxford Street decision is taking place during an improvement in trading across the chain rather than a reported fall in overall sales.

What people are saying

Managing director Phil Halliday has expressed frustration at the financial position of the Oxford Street branch. He has emphasised its importance as HMV's original home and described the return in 2023 as a major moment in the retailer's more recent history.

Halliday's response has focused on the company's plans for 2027 rather than preserving the address at any cost. He says the business is actively pursuing a replacement location and wants its next London flagship to offer music customers a store worthy of the capital.

On staffing, he has set out an intention to limit the employment impact while that search continues. Moving people into other branches or head-office roles is the company's preferred approach, although the commitment is to seek redeployment rather than promise a transfer for every employee.

Halliday has separately criticised the tax burden on high-street businesses. He has argued that shop-based retailers have borne more of that burden than online competitors such as Amazon and Apple, and that the distribution should be more balanced. Those wider concerns are distinct from the property costs cited for this closure.

The financial picture

HMV expects revenue from its shops and online business to reach £240 million, compared with £212 million in 2025. That would represent an increase of £28 million. The forecast covers both sales channels, rather than measuring the performance of the Oxford Street branch alone.

The annual revenue forecast and the 15% sales increase describe different measures over different periods. One is an expected full-year total; the other records growth during the first nine months. Neither figure is a measure of the profit earned by an individual shop.

That distinction matters when considering a branch closure during a period of growth. Revenue measures money coming into a business from sales. A shop's financial contribution also depends on the costs of making those sales and maintaining the premises, including its rent.

Rent and renovation work create different demands on a retailer's finances. Rent is a recurring cost of occupation, while building work requires expenditure on the premises themselves. Stronger trading across a group does not, on its own, settle whether taking on both commitments at one location makes commercial sense.

What happens next

The company's immediate property task is to find a West End site that can serve as its next flagship. A replacement would allow HMV to carry forward its central London ambitions at a different address, separating the future of that operation from the historic building.

Alongside the search, HMV will look at positions across its remaining London shops and head office for the affected workforce. These are different parts of the business, so the redeployment effort involves more than simply moving the existing store team together into another retail unit.

The scheduled March 2027 departure is the next fixed milestone. The move follows an earlier cycle of closure and return at Oxford Street, but this time the company is planning its exit while explicitly continuing to pursue a flagship elsewhere in the same district.

For the business, the next location decision will bring together two objectives: maintaining the London presence it has promised and avoiding the financial burden it says the current premises would impose. Its commitment to high-street retail does not require keeping every existing address.

Why this matters

For UK music buyers, the decision underlines the difference between losing a prominent branch and losing access to the retailer as a whole. HMV continues to operate through a wider shop network and online, even as its best-known historic London address faces another change.

For high-street businesses, the practical issue is the relationship between customer demand and the cost of serving it. Growing sales of physical music support HMV's wider recovery, but the Oxford Street decision shows how property commitments can still determine whether a particular shop remains part of that business.