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HMV announces it is now in administration

UK high street retailer HMV is the latest to feel the pinch from the online shopping boom, announcing last night that it has called in the administrators.

The news comes less than a week after another high street electrical retailer, Jessops, entered administration and closed all stores, and shortly after Comet closed its doors. For employees and those involved in the industry, the writing has been on the wall for some time now, with sales numbers falling as a result of more people going online to buy cheaper CDs, DVDs and even electricals.

HMV has recently started to try its hand at selling gadgets, with everything from budget Android tablets to iPads and even high-end AirPlay speakers to be found in stores. However, the firm said last night that it would appoint Deloitte as administrators, with stores to remain open while a buyer for the brand is looked for. A statement given to Music Week last night says;

On 13 December 2012, [HMV] announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.

“Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, the Board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect.

HMV currently employs around 4,300 people in the UK and operates over 230 stores across the country. For the time being, these will all remain open. We have our fingers crossed that the company can pull through, as it’s been a staple of the UK high street for such a long time.

UPDATE

The company has now confirmed that it will not be accepting any gift cards or vouchers during its administration process.

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