Breaking News: Blockbuster calls in administrators

No even the time to publish the post related to HMV yesterday and today there is yet another announcement. Yet again the latest high street casualty is related to the same trend in customer movie consumption and the shift towards online consumption.

This time the big name is Blockbuster UK.  The chain has been in trouble these last few years with more people switching to only movie consumption and the credit crunch, however the chain still had 528 stores and employs 4,190 staff.

 Blockbuster UK’s announcement comes just after the announcement of HMV which also fell into administration and Jessops which closed doors just last week.

As usual administrators will try to get the most of out the business and try to secure the jobs were possible and pay off as much of the creditor balances as possible.

Breaking News: HMV closing down

HMV is the latest casualty in this crisis and the biggest since Woolworths closed its doors. The demise of HMV although it has been probably helped by the current crises can be linked to a number of other reasons.

Basically the chain has been very slow to react to changes in customer wants. Less people were demanding physical copies of cds and dvd. In todays digital era, people are choosing to download music and movies so the brick and mortar formula was out dated.

Another issue that affected HMV might have been the lack of direction. It is very difficult and time consuming to change the product focus of a successful store and HMV has just run out of time. There could have been a number of other opportunities which HMV could have worked on, including partnering with famous artists and produce clothing wear, become sole retailer of a number of upcoming gadgets etc. However this could now be history. 

All this things have led the 92-year-old music store to become the latest high street casualty. Unfortunately as in other cases, those most hit are it's own employees (4,350 jobs are at risk if the chain closes) and it's smaller share holders who saw their share price drop from 274p in 2005 to less than 2p yesterday.
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This puts more pressure on the economy as these lost jobs are added up to the jobs lost in the recent collapses of camera trader Jessops and electrical retailer Comet that together cost more than 8,000 jobs. 

According to different sources, the appointed administrators will keep the profitable “core” of stores operating. However, bad news might be on it's way for customers who have bought gift cards or have received them this Christmas as it is understood that HMV has emailed all stores telling staff not to accept gift cards.

The 4-fingered chocolate battle

Have you ever thought about KitKat's shape in the form of 4 fingers and how that came about? Nestle, which owns Kitkat, has just won a trademark battle against Cadbury in a European-wide ruling re-instating that the four-fingered and three-dimensional shape of the KitKat is exclusive to Nestle. What this effectively means is that no confectionery manufacturer can produce and sell chocolates in the form of the KitKat's 'four-fingers'.

The original KitKat manufacturer, Rowntree in Yorkshire, launched KitKat in the 1930s after an employee's recommendation that the company should produce "a chocolate bar that a man could take to work in his pack up". The result was the four-finger chocolate bar as we know it today. It was an immediate success and was then rolled out all across the UK.

Much later, in 2006, Nestle registered the shape of the KitKat as a trademark, but rival Cadbury then won an appeal that invalidated the registration. Now Nestle has emerged again as the winner. 

While many seem to have had similar foresight and registered their shapes, imagery, colour etc as unique trademarks, e.g. Ferrero Rocher's golden paper-wrapped chocolates and Hershey's kisses, significant fortunes must have been lost by failing to register trademarks on time, such as the recent case of the chocolate Easter Bunny.

One could argue that because we now live in a time where image is everything and anything can set a company apart from its competitors, such rulings would enable companies to protect their competitive advantage. Do you agree with this ruling? Can it lead to anti-competitiveness?