Advertisement

  1. ITV Report

HMV goes into administration for second time in six years

HMV has fallen into administration for the second time in six years.

The entertainment retailer confirmed it has appointed administrators from KPMG following a weak Christmas period.

The executive chairman of HMV - and its its owner Hilco Capital which purchased the company in a 2013 rescue deal - said deterioration in the UK CD and DVD market made the situation "unsustainable".

During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, whilst HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.

HMV has clearly not been insulated from the general malaise of the UK High Street and has suffered the same challenges with Business Rates and other government-centric policies which have led to increased fixed costs in the business.

Business Rates alone represent an annual cost to HMV in excess of £15m. 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

The company's 125 stores across the UK will continue to trade, HMV confirmed, while negotiations with suppliers and potential buyers are ongoing.

The retailer was rescued by current owner Hilco in 2013. Credit: PA

HMV said despite growing its market share through the year, the industry expects to see the market fall another 17% in 2019, leading the directors to conclude it cannot continue to trade.