HMV calls in administrators
Entertainment retailer HMV has called in administrators following “extremely weak” Christmas sales. The move has put 2,200 jobs at risk.
In a statement, the company also blamed a further deterioration in the UK market for DVDs which fell by 30% over this year’s Christmas trading period compared to last year.
A buyer is currently being sought for the business and HMV’s 125 UK stores will continue to trade while negotiations are ongoing with the major suppliers in the music and movie industries.
HMV also went into administration six years ago before it was bought by current owner Hilco Capital for £50 million.
Paul McGowan, executive chairman of HMV and Hilco, said yesterday: “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.”
HMV also said it had not been immune to challenges facing UK high streets and highlighted how its annual business rates alone represented an anuual cost to the business in excess of £15 million.
McGowan added: “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.”
