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.

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