HMV prepares to call in administrators

HMV prepares to call in administrators

It seems the end of the road for Nipper is now just around the corner…

Sometime music and film retailer HMV is preparing to call in the administrators as it becomes the highest profile entertainment retail chain to collapse during the current economic malaise.

Around 4,500 jobs are at risk at the 90-year-old retailer after its Board called in Deloitte as administrators following poor results over the Christmas trading period – the time of year when it traditionally makes most of its sales.

HMV has been struggling with falling sales and mounting debt for just over 2 years, and while banks and creditors have revised the terms of loans it was thought to been handed a lifeline after its suppliers, including Universal Music, EMI, Warner Brothers and Disney, were handed shares in exchange for improved commercial terms.

But those firms last night (Sun 13th Jan) refused to agree to provide additional financing to the retailer, effectively leaving it with few options to find the extra resources needed to keep trading.

It will be interesting to see what the impact will be on the film companies and record labels which rely on its 247 stores for their sales. Despite the reported drop in physical sales HMV still sells 27% of all DVDs and Blu-Ray discs and 38% of the physical music market.

Whilst few of the artists featured here at LTW could ever have hoped to have their releases stocked by HMV, the loss of such a high profile music retailer has to be a worry for the entire industry; or will the independent retailers benefit by no longer have to compete with the savage cost cutting practiced by HMV?

When did you last buy a CD/LP from HMV?

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6 comments on “HMV prepares to call in administrators”

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  1. For too long have HMV been offered preferential terms by record companies. The truth is that if it had been a level playing field HMV would have gone under years ago. This will be welcome news to independent record shops up and down the country who have long struggled to compete and are actually passionate about the music they are selling, rather than just being profit-driven mercenaries. With this I hope Fopp closes too – a disgusting sham keeping that open when it is effectively run by HMV. Music is changing. Much of it is for the worse, but the only bad news here is that many people will lose their jobs.

  2. It’s really sad for the HMV workers, who I’m guessing don’t get well paid anyways, this is another kick in the teeth for them. But for too long huge businesses like HMV have ruled the high streets – I hope this gives the smaller record shops a fighting chance – Action Records in Preston & Probe Records in Liverpool. Good luck to all the current HMV workers though x

    • Good call in respect of Probe and Action Records, be great to see Bob’s cheery face as people flock into Probe seeking the new Robbie Williams release!! That said I’d guess the L’Pool One flagship store will be one of the ones to remain open.

  3. I can remember HMV stores being more expensive than the independent stores years ago. That all changed when all the supermarkets like Tesco and Asda came into the market. I was given £20 vouchers last year went in a few times and couldn’t decide what I wanted, then when Madness released their last album I bought that and the Killers for £15. You could never get those prices years ago, they averaged £10 to £12.99.
    The collapse of HMV is being blamed on the digital download market. I don’t believe this entirely, the truth is the biggest market for music was always teenagers and these days they know how to swipe it from from the internet for free. They are not even bothered about sound quality as most of the time it’s going they will play it on portable devices like their ipods and phones. They can also swipe a full quality video for YouTube or just play the song over and over. If they can hear it or see it for free they will spend their money elsewhere on the latest must have fashion accessories or latest console game. When I was a teenager it was music first everything after.
    Another reason is something that I’ve been guilty of is purchasing a CD and then rip it in full quality to hard drive and make an MP3 version for my Ipod too. Then stick the CD on ebay so someone else gets a bargain.
    If we are going the way of digital download then it’s time all bands demand a full quality downloadable versions instead of MP3s and MP4s.
    I also think it was bad decision for HMV to sell electronics, headphones, docks etc and computer games, they’ve always been cheaper on line and if you are in the high street there are too many other places selling them. Nine times out of ten there will be a Currys just a few steps away and people don’t associate the HMV brand with electronics. HMV could have done a lot more with music years ago but simply rested on their laurels whilst changes have taken place.

  4. Though I think perhaps we should feel sad for the thousands of people who could lose their jobs and may well among them count a lot of people who are passionate about music, HMV is a textbook case on what happens to a business when it becomes complacent due to a lack of (visible) competition. After Virgin/Zavvi went in most towns and small cities they had carte blanche to wrack up the prices, which they did to the extent that you could pay 1/2 the money for some CDs and DVDs on line. People may pay a couple of quid to take something home on the day, but for that amount more most are happy to wait.

    Hopefully the gap in the market that has now appeared will be filled by small concerns who know their customers and their needs a lot better

  5. PS don’t mean that as a knock at the poster above btw, didn’t read that until after I posted it

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