Historic British music and entertainment retail chain HMV is falling into administration following soft December sales.
The move puts over 2,200 jobs at risk at the 97-year-old company. HMV last fell into administration in 2013 before being rescued by restructuring experts Hilco.
Hilco has today (December 28) confirmed HMV’s troubles, and has appointed KPMG as the firm’s administrator
HMV’s 125 UK stores will remain open while discussions with suppliers and potential acquirers continue.
“Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”
Paul McGowan, HMV
Paul McGowan, Executive Chairman of HMV and Hilco Capital, said: “During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, whilst HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.
“HMV has clearly not been insulated from the general malaise of the UK High Street and has suffered the same challenges with Business Rates and other government-centric policies which have led to increased fixed costs in the business.
“Business rates alone represent an annual cost to HMV in excess of £15m.
“Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”
“Following its first move into administration in 2013, HMV has enjoyed a remarkable turnaround and it is conceivable that this will happen again.”
Entertainment Retailers Association CEO Kim Bayley said, “After what has been widely reported as a tough fourth quarter for retailers, HMV is not the only High Street name facing tough decisions right now.
“It is a fast-moving situation and it is too early to say how it will end. What is clear is that following its first move into administration in 2013, HMV has enjoyed a remarkable turnaround and it is conceivable that this will happen again.
“The fact is the physical entertainment market is still worth up to £2bn a year so there is plenty of business there. For the sake of HMV’s staff, customers and suppliers, we are very much hoping HMV can turn things around again.”Music Business Worldwide
