HMV to go into administration
January 15 2013
High street entertainment chain HMV is to go into administration, leaving the future of over 4,000 in doubt. The 92 year old retail group, whose vouchers and gift cards are now practically worthless, has appointed administrators Deloitte (who oversaw the closure of Comet before Christmas) to try and rescue it.
Nick Edwards, joint administrator and restructuring services partner at Deloitte, commented: “HMV is an iconic retailer and continues to be a very popular brand, but as we have seen with many high-street retailers, the market is changing rapidly and conditions are currently very tough.”
Trevor Moore, the chief executive of HMV, said: “We remain convinced we can find a successful business outcome. We want to make sure it remains on the high street.
HMV, which has debts of around £176.1m, has suffered due to the price deflation in CDs, DVDs and games, the shift to downloading, the big supermarkets and online giants such as Amazon.
HMV is the latest high street name to come face to face with financial difficulty and its collapse is not entirely surprising considering it was the last remaining entertainment chain following the demise of retailers such as Woolworths and Zavvi.
Deloitte say that HMV stores will continue to trade whilst as it seeks a buyer for all, or part, of the business. However experts believe that up to half of HMV’s stores could close within a year in an attempt to slash its debt burden.
Mr Moore described HMV’s performance over Christmas as “disappointing” and added that “we had a very limited supply of two key brands of tablets”, reference to Apple and Google’s decision not to supply it with their popular tablets.
HMV has been in trouble for sometime and was known to be having crises talks with its banks including The Royal Bank of Scotland, Lloyds and Santander.
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