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HMV Goes Into Administration

Author:
Jonathan Lester
Category:
News
Tags:
Administration, HMV, UK retail

HMV Goes Into Administration

4000 Jobs & 236 Stores At Risk

HMV will be calling in the administrators today after failing to agree on new terms for its outstanding debts, potentially placing 4350 jobs at risk if a buyer isn't found.

The struggling chain found themselves in financial dire straights before a bank rescue package bought them a year's grace last January.  The plan was to roll back their borrowings by 50% over the next three years, but it appears that they were unsuccessful in hitting the bank's targets during the first twelve months. Pleas to suppliers for emergency capital fell on deaf ears.

"The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect," reads a statement from the HMV board of directors, made last night.

Deloitte will assume the role of administrators, stating that, "the directors understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business." Stores have thusly opened today.

Several companies are rumoured to be interested in acquiring at least a portion of the 236 stores, including Hilco (who bought HMV's Canadian division last year) and Apollo Global Management.

The reaction has even reached Whitehall, with Labour's Shadow Business Secretary mourning the loss of a "national institution." "HMV is a national institution that has been a feature of our high streets for over 90 years so this news is deeply worrying," said Chuka Umunna MP. "For the sake of HMV's employees, we hope a way can be found to keep the business going. The demise of HMV – a national institution – would be a sad loss for British retail."

Indeed, we hope that buyers will be found and that the workforce will retain their positions. We naturally wish them the very best in what are bound to be testing times.

Add a comment4 comments
Kopite211  Jan. 15, 2013 at 11:35

Massive shame, though their prices for games always seemed extortionate as did any DVD or blu ray that wasn't mainstream and wasn't part of the sale.

DivideByZero  Jan. 15, 2013 at 14:12

Yep, shame for the staff. But the prices meant buying stuff in there was pretty pointless unless you couldn't wait a day for the post. Even their 2 for £10 wasn't great as you could find most titles for under £4 online.

Also, add that to the fact that supermarkets have a sizable game, music and film section now and you have very little market left for HMV.

That said, I will have to find somewhere else to go while my other half is looking at girls stuff. Hopefully this will spawn some independent stores, which will have a little more soul (and I don't mean the music genre).

If the shops do shut, I wonder what will happen to the stock?

Breadster  Jan. 15, 2013 at 16:31

As you guys have pointed out, the prices are a joke in there. I would feel sad to see them go though. I do kinda agree with them being a "national institution". The high street won't be the same without them. Can't help thinking it's their own fault though with the prices, just like when GAME went to pot a bit ago.

DarthBlingBling  Jan. 15, 2013 at 21:20

Yep, shame for the staff. But the prices meant buying stuff in there was pretty pointless unless you couldn't wait a day for the post. Even their 2 for £10 wasn't great as you could find most titles for under £4 online.

Also, add that to the fact that supermarkets have a sizable game, music and film section now and you have very little market left for HMV.

That said, I will have to find somewhere else to go while my other half is looking at girls stuff. Hopefully this will spawn some independent stores, which will have a little more soul (and I don't mean the music genre).

If the shops do shut, I wonder what will happen to the stock?


I worked for Zavvi when it went Pete Tong. I think if the administrators can't find a buyer then they'll try to recoup as much money as possible by selling the stock at a price that will shift most of it within a short time frame. Basically a good old fashioned closing down sale. Or they could give it back to the supplier if they have such an agreement. Finally sell the stock in bulk to another re-seller.

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