This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.bbc.co.uk/news/business-46699290
The article has changed 11 times. There is an RSS feed of changes available.
Version 8 | Version 9 |
---|---|
HMV calls in administrators for second time in six years | HMV calls in administrators for second time in six years |
(35 minutes later) | |
Music retailer HMV confirmed it is calling in KPMG as administrators. | |
The move, the second in six years, involves 2,200 staff at 125 stores. | 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 a "tsunami" of retail challenges, including business rate levels and the move to digital. | Owners Hilco, which took the company out of its first administration in 2013, blamed a "tsunami" of retail challenges, including business rate levels and the move to digital. |
It said the stores would continue to trade while negotiations were held with major suppliers and it looked for buyers. | 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: "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." | Paul McGowan, executive chairman of HMV and its owner Hilco Capital, said: "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." |
He pointed out HMV sold 31% of all physical music in the UK in 2018 and 23% of all DVD and Blu-ray, with its market share growing month by month throughout the year. | He pointed out HMV sold 31% of all physical music in the UK in 2018 and 23% of all DVD and Blu-ray, with its market share growing month by month throughout the year. |
But he added that the industry consensus is that the market will fall by another 17% during 2019 and therefore it would not be possible to continue to trade the business. | But he added that the industry consensus is that the market will fall by another 17% during 2019 and therefore it would not be possible to continue to trade the business. |
Gift vouchers | 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." |
Analysis by Rory Cellan-Jones, BBC technology correspondent | Analysis by Rory Cellan-Jones, BBC technology correspondent |
With video and music still its main sources of revenue, HMV was always likely to be one of the retailers struggling to make it through the Christmas holidays. | With video and music still its main sources of revenue, HMV was always likely to be one of the retailers struggling to make it through the Christmas holidays. |
But this is about more than a struggle to adapt to changing consumer habits. | But this is about more than a struggle to adapt to changing consumer habits. |
In millions of households, watching a movie now means turning to Netflix rather than selecting a DVD, and listening to music means streaming it from Spotify instead of heading up to the attic to hunt through old CDs. | |
HMV faced the same pressures of low consumer confidence, high rents and a lacklustre Christmas that have put other high street names in danger. | HMV faced the same pressures of low consumer confidence, high rents and a lacklustre Christmas that have put other high street names in danger. |
And don't be surprised if this is not the end of the story. | And don't be surprised if this is not the end of the story. |
The Entertainment Retailers Association points out that when you tot up music, video and games there is still a market of nearly £2bn worth of physical products. | The Entertainment Retailers Association points out that when you tot up music, video and games there is still a market of nearly £2bn worth of physical products. |
Big releases such as The Greatest Showman, Ed Sheeran and Adele have still attracted millions who want to own a physical copy. | Big releases such as The Greatest Showman, Ed Sheeran and Adele have still attracted millions who want to own a physical copy. |
So maybe there is another turnaround specialist out there to keep the HMV name alive into its second century. | So maybe there is another turnaround specialist out there to keep the HMV name alive into its second century. |
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. | 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. |