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MusicMagpie
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=== musicMagpie’s development === The company was founded in 2007 by Steve Oliver and Walter Gleeson with an initial focus on buying and selling pre-owned CDs and DVDs from and to its customers. From an online perspective the company developed its distribution by initially offering items on Amazon’s websites in the UK (2008), the United States, France and Germany (2009), and then on eBay (2011). In 2012 the company entered the consumer technology market and also launched its US business. Its own online stores (www.musicmagpie.co.uk and www.decluttr.com) were launched in 2015 and 2017, respectively. Books were introduced in 2016. The company also developed a physical presence with the launch of its first ‘That’s Entertainment’ retail outlet in 2009, which quickly grew to over 30 stores by 2011, before management decided to close its retail outlets in 2018 in order to focus on online. MMAG currently has wholesale partnerships with a number of high street retailers such as ASDA. In 2020/21, MMAG launched three UK-focused initiatives that are expected to drive further revenue growth with three key aims from customers, ‘buy more, sell more, rent more’, while enhancing MMAG’s profitability. For ‘buy more’ and ‘sell more’, two initiatives are focused on increasing the potential sources of products that can be on sold: the SMARTDrop kiosk, in which sellers can easily recycle phones in partner retail locations in a quicker/more efficient way; and Magpie Circular, a first step that introduces MMAG’s trade-in offer to corporates. For ‘rent more’, the October 2020 launch of smartphone rentals, and the February 2022 expansion of the service to other consumer technology products such as tablets, gaming consoles, MacBooks and wearables, is focused on building recurring revenue, with significantly higher EBITDA over the life of the device, as opposed to the outright sale historically pursued by MMAG. Its estimates suggest MMAG’s rental activities are likely to be the most significant driver for future growth in revenue and profits. MMAG builds brand awareness via advertising on television, online and through social media. It proactively promotes personalised offers to its existing customer base by targeted emails. '''Exhibit 3: Revenue profile<ref name=":0">Source: musicMagpie.</ref>''' [[File:Image3-864b662bcea7baa595b4eb1433877689.png|600x600px]] '''Exhibit 4: Gross profit<ref name=":0" />''' [[File:Image4-daa9a6af2329ac239370761285d3679b.png|600x600px]] Since being introduced to the offer, Technology has become the largest source of revenue. At £86m in FY21 it represented c 59% of the group total, while Media and Books represented 35% and 6%, respectively. The average gross margin has improved, from 23.2% in FY18 to 30.4% in FY21, due to higher margins for all categories (except for Books in FY21) offset by mix changes. With respect to mix changes, the increasing importance of Technology (lower average percentage margin but higher cash profit) and Books (higher average percentage margin) have been positive for the overall gross profit and/or margin, offset in part by the declining importance of Media (higher average percentage margin).
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