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.