HMV has confirmed that it is to call in administrators after being battered by “extremely weak” Christmas shopping for and promoting on the extreme avenue and a collapse in demand for CDs and DVDs.
It could be the second time in six years that that the retailer, which employs about 2,200 of us, has fallen into administration.
An announcement from the company – confirming a story first reported by Sky News – pointed to a “tsunami of challenges” coping with UK retailers.
It talked about its 125 UK retailers would proceed to commerce as it held talks with foremost suppliers inside the leisure enterprise – with report labels wanting to avert the disappearance of the ultimate foremost specialist music retailer on the extreme avenue.
The agency added that patrons had been moreover being sought to take over the enterprise.
HMV – fast for “his master’s voice” – dates once more to 1921 when its first retailer on London’s Oxford Street was formally opened by the composer Sir Edward Elgar.
The agency talked about it had “resolved to appoint administrators from KPMG” after “extremely weak Christmas footfall and a deterioration in the UK market for CD and DVD”.
Executive chairman Paul McGowan talked about consumers had switched “at an ever increasing pace” to digital downloads as an alternate.
HMV beforehand fell into administration in January 2013 sooner than being acquired by present proprietor Hilco in a £50m deal.
Mr McGowan talked about efforts had been made to drive down costs by way of agreements with landlords and the utilization of know-how.
“However, 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,” he added.
Mr McGowan talked about the enterprise had moreover suffered from the “general malaise” affecting the extreme avenue, pointing particularly to its annual enterprise costs bill of larger than £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.”
HMV talked about that it provided 31% of all bodily music inside the UK and 23% of all DVD and Blu-ray and that its market share had grown month by month all yr lengthy.
However, it added that enterprise consensus was that the market as a complete would fall by one different 17% all through 2019.
“As a result the directors have concluded that it will not be possible to continue to trade the business.”
The announcement comes amid expectations of a hard end of yr shopping for and promoting interval for the retail sector – with Sports Direct and House of Fraser boss Mike Ashley describing conditions in November as “the worst in living memory” and that struggling chains confronted being smashed to objects.
Meanwhile funds womenswear chain Bonmarché talked about conditions had been unprecedented and worse than in the midst of the recession, whereas Primark and Superdry moreover flagged highly effective extreme avenue conditions and even on-line retailer Asos has not been immune, issuing a earnings warning.