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HMV enters administration for second time in six years | HMV enters administration for second time in six years |
(35 minutes later) | |
Music retailer HMV confirmed it has called in KPMG as administrators. | Music retailer HMV confirmed it has called in KPMG as administrators. |
The move, the second in six years, involves 2,200 staff at 125 stores. | |
Owners Hilco, which took the company out of its first administration in 2013, blamed extremely "weak Christmas footfall and a further deterioration in the UK market for CD and DVD". | |
It said the stores would continue to trade while negotiations were held with major suppliers and it looked for buyers. | |
Paul McGowan, executive chairman of HMV and its owner Hilco Capital, said: "In the six years since the HMV business was rescued from a previous Administration process the entire team has been immensely hard-working and engaged with the business and has captured market share from all of its competitors. | |
"As such, it is disappointing to see the market, particularly for DVD, deteriorate so rapidly in the last 12 months as consumers switch at an ever increasing pace to digital services." | |
Gift vouchers | |
Holders of gift vouchers are being advised to consider spending them sooner rather than later. | Holders of gift vouchers are being advised to consider spending them sooner rather than later. |
BBC Money Box presenter and financial journalist Paul Lewis has advised people to use any HMV gift cards immediately. | BBC Money Box presenter and financial journalist Paul Lewis has advised people to use any HMV gift cards immediately. |
According to consumer publication Which?, whether vouchers and returns will be accepted following administration depends on the administrators. | According to consumer publication Which?, whether vouchers and returns will be accepted following administration depends on the administrators. |
Their role is to "try and save the company", and in doing so, they "may take the decision not to accept returns". | Their role is to "try and save the company", and in doing so, they "may take the decision not to accept returns". |
'Sand not rocks' | 'Sand not rocks' |
Hilco's ownership saw HMV host live events in store, with musicians including Kylie Minogue, Stormzy and The Darkness. | Hilco's ownership saw HMV host live events in store, with musicians including Kylie Minogue, Stormzy and The Darkness. |
Digital music revenue overtook sales of physical formats like CDs and records for the first time in 2012. | Digital music revenue overtook sales of physical formats like CDs and records for the first time in 2012. |
Since then, online shopping, downloads and streaming provided by platforms such as Amazon, Spotify and Netflix, have continued to eat into sales of physical music. | Since then, online shopping, downloads and streaming provided by platforms such as Amazon, Spotify and Netflix, have continued to eat into sales of physical music. |
Julie Palmer, partner at business consultancy Begbies Traynor, said the fall of HMV had been "coming for many years". | Julie Palmer, partner at business consultancy Begbies Traynor, said the fall of HMV had been "coming for many years". |
She added: "It has been revealed that the business turnaround has been built on a bed of sand rather than rocks." | She added: "It has been revealed that the business turnaround has been built on a bed of sand rather than rocks." |
Weak retailing | Weak retailing |
Richard Lim, Chief Executive, Retail Economics, said HMV's situation came amid a weak retailing climate: "Poor Christmas trading has claimed its first victim." | Richard Lim, Chief Executive, Retail Economics, said HMV's situation came amid a weak retailing climate: "Poor Christmas trading has claimed its first victim." |
But the chief executive of the Entertainment Retailers Association, Kim Bayley, said there was hope: "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. | But the chief executive of the Entertainment Retailers Association, Kim Bayley, said there was hope: "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." | "The fact is the physical entertainment market is still worth up to £2bn a year so there is plenty of business there." |
While Christmas is normally a time of higher revenues for retailers, the number of shoppers hitting the post-Christmas sales dipped this year. | While Christmas is normally a time of higher revenues for retailers, the number of shoppers hitting the post-Christmas sales dipped this year. |
Britain's shops have also faced uncertainty over Brexit, which sparked a fall in the pound and therefore raised the price of imported goods, as well as rising labour costs, higher business property taxes and unseasonably warm weather. | Britain's shops have also faced uncertainty over Brexit, which sparked a fall in the pound and therefore raised the price of imported goods, as well as rising labour costs, higher business property taxes and unseasonably warm weather. |
HMV, known for its iconic logo featuring the "dog and trumpet", is Britain's last surviving national music retailer. | |
It was launched by English composer Edward Elgar in 1921, selling gramophones, radios and popular music hall recordings. | It was launched by English composer Edward Elgar in 1921, selling gramophones, radios and popular music hall recordings. |