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?