HMV enters administration for second time
31 Dec 2018
The music and film chain, which employs around 2,200 people across 125 stores and was rescued in 2013, has officially entered administration again following falling sales and changing consumer spending patterns
31 Dec 2018
The administration will be handled by KPMG after the firm was called in by HMV’s owner, Hilco Capital, following a hearing before a High Court judge on 28 December 2018.
This is the second time that the troubled retailer has entered administration. In 2013, following increased competition from online retailers, the company’s board announced that it did not feel ‘to continue to trade outside of insolvency protection’.
The administration was handled by Deloitte, with the company being sold to Hilco Capital. In the six years since, the company reduced the number of stores it owned from 239 to 125 and cut its staff by approximately half. Despite overtaking Amazon as the UK’s biggest seller of physical music in the UK in 2015, it saw DVD sales fall by over 30% in the months leading up to Christmas.
Will Wright, Neil Gostelow and David Pike from KPMG’s restructuring practice have been confirmed as joint administrators. Wright ascribed the company's financial difficulty to changing tastes and a decrease in the sale of physical media: 'For decades, HMV has been one of the most iconic names on the high street.
'While we understand that it has continued to outperform the overall market decline in physical music and visual sales, as well as growing a profitable ecommerce business, the company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industry.
'This has been in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures.
'Over the coming weeks, we will endeavour to continue to operate all stores as a going concern while we assess options for the business, including a possible sale.'
Report by James Bunney