HMV calls in hotshops for £17m review

Music retailer plans brand campaign in bid to combat high-street sales slump.

HMV is reviewing its estimated £17 million above-the-line advertising account. It is looking for an agency to create a new brand campaign.

The retailer has approached a number of creative hotshops with a view to holding credentials meetings for its account in the coming weeks.

HMV's creative account is held by Beechwood Group. It is unclear whether the agency will be invited to repitch.

Graham Sim, HMV's newly appointed marketing director, is conducting the review directly. Media, which is handled by OMD, is not expected to be included.

The review comes two months after the troubled retailer announced a £100,000 slump in profits and a 6.1 per cent slide in sales at its UK stores over Christmas.

The company blamed the decline on economic factors, including the growth in sales of DVDs and CDs at supermarkets, as well as internet downloads.

In February this year, HMV rejected a £762 million takeover bid from the private equity company Permira.

Earlier this month, HMV's proposed acquisition of the Ottakar's bookshop chain was provisionally cleared by the Competition Commission. The deal would see Ottakar's merged with HMV's Waterstone's business.

Beechwood previously held the Waterstone's ad account before it moved into St Luke's after a review in July 2005. The review, which was handled by the AAR, saw DFGW and Burkitt DDB also compete for the business, estimated to be worth £5 million.

HMV denied making any approaches to agencies.

Comment, page 44.

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