After officially closing up shop here in Canada, HMV's future in the U.K. is looking incredibly bleak. The 97-year-old music retailer has announced it is going into administration in the U.K. once again, marking the second time its made the move in six years.
HMV confirmed today that it is calling in KPMG as administrators, the BBC reports. The move puts 2,200 employees and 125 stores at risk.
After taking HMV out of its first administration in 2013, owners Hilco blamed a "tsunami" of retail challenges, among them consumers' move to digital. Hilco confirmed that for the meantime the stores would continue to operate while it looked for buyers.
In a statement, executive chairman of HMV and Hilco Paul McGowan said the decline in the CD and DVD market had made the situation next to impossible for the retailer.
"During the key Christmas trading period, the market for DVDs fell by over 30 percent compared to the previous year, and while HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable," he said.
"HMV has clearly not been insulated from the general malaise of the U.K. 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 U.K. retailers over the last 12 months, on top of such a dramatic change in consumer behaviour in the entertainment market."
With the move coming directly after Christmas, many analysts are encouraging shoppers to use any gift certificates as soon as possible, as well as make any exchanges or refunds.
The announcement in the U.K. follows news last week that HMV would be closing all its stores in Hong Kong.
HMV closed all its locations in Canada back in 2017.
HMV confirmed today that it is calling in KPMG as administrators, the BBC reports. The move puts 2,200 employees and 125 stores at risk.
After taking HMV out of its first administration in 2013, owners Hilco blamed a "tsunami" of retail challenges, among them consumers' move to digital. Hilco confirmed that for the meantime the stores would continue to operate while it looked for buyers.
In a statement, executive chairman of HMV and Hilco Paul McGowan said the decline in the CD and DVD market had made the situation next to impossible for the retailer.
"During the key Christmas trading period, the market for DVDs fell by over 30 percent compared to the previous year, and while HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable," he said.
"HMV has clearly not been insulated from the general malaise of the U.K. 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 U.K. retailers over the last 12 months, on top of such a dramatic change in consumer behaviour in the entertainment market."
With the move coming directly after Christmas, many analysts are encouraging shoppers to use any gift certificates as soon as possible, as well as make any exchanges or refunds.
The announcement in the U.K. follows news last week that HMV would be closing all its stores in Hong Kong.
HMV closed all its locations in Canada back in 2017.
