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| 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 has 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 DVDs and Blu-rays, with its market share growing month by month throughout the year. | |
| But he added that the industry consensus was that the market would 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. | 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," he said. | |
| 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. |