UK electronics and entertainment retailer HMV has announced that it will enter administration today, after revealing that it will be unable to honour debt payments due by the end of January. Around 4500 jobs and over 200 stores are at risk.
Update 1: Eurogamer reports that all existing HMV preorders will be honoured. Phew.
Original story continues: According to the Financial Times (via MCV), the firm sought a bailout totalling £300 million last night from suppliers, including Universal Music, EMI, Warner Brothers and Disney. The retailer's partners were unwilling to cough up, however, and HMV appointed Deloitte as administrators earlier this morning.
Here's the official statement, care of CVG. Best of luck to all affected.
On 13 December 2012, the Company 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.
The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.
It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.
The Company's ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect.
23 comments so far...
TinnoUnited on 15 Jan '13 said:
Sad, but shouldn't be a shock to anyone. We can't really complain about it either, unless you bring tax into it.
SkinnerChinner on 15 Jan '13 said:
A shame, however, is it just me or do HMV always seem to be the most expensive?
And Deloitte as administrators? I feel sorry for the workers whose jobs are at risk - especially if it can't be saved, the rep sent to my old Woolworths store when liquidation began was un-cooperative, unhelpful & just plain rude at times.
msbhvn on 15 Jan '13 said:
Read about this earlier and it made me a bit sad, but HMV have been circling the drain for years. They couldn't be bothered even attempting to compete with online stores, but every so often I'd find something for a good price and buy it. Hopefully someone will step in and buy them, because they deserve to survive a lot more than GAME with its "let's just add £3 to the price of everything" policy.
RetroDad on 15 Jan '13 said:
You know it. I wouldn't be surprised if GAME falls for a second time. Can't speak for all stores, but my local Bromley branch has been shocking of late. The price of chart games and general knowledge / customer service have failed to impress. There is just an element of nostalgia I have about being able to walk into a store to browse though. I can't remember the last time I was in a branch of HMV, which is telling in itself.
Bezza89 on 15 Jan '13 said:
Think I'll join in; it's bad for the staff but HMV never adapted for the online retail sector and are more expensive than gold hats. You can't keep charging preinternet prices in an age where it's dirt cheap on the internet and piracy is also rife.
STE MO on 15 Jan '13 said:
I have no sympathy for the company, I really feel for the staff. Instead of HMV sticking to what they know they seem to have diversified and moved into a jack of all trades company. They should have streamlined the business and tried to compete with itunes. But instead they've filled their stores with an abundance of stock that never gets sold and cloggs all the walkways. I remember when evrything at my old local HMV was tidy and organised, now it's stacks here, there and everywhere. Can't get into the shop with the wife in her wheelchair either. I hope it pulls through though and sorts itself out.
CunningSmile on 15 Jan '13 said:
My local GAME has just closed and moved to one of the branches they originally closed, go figure.
And I think the last time I was in HMV was just before Christmas because I got caught in the rain and they had the largest door. Can't remember the last time I shopped there though.
vadersmyfather on 15 Jan '13 said:
For me, buying anything in stores nowadays is reserved for knee-jerk decisions.
FishyGinger on 15 Jan '13 said:
On the high street? I saw the gamestation was it that had closed down around the corner near the dark and dingy mall. Otherwise the ladyfriend and I were in hmv as she was buying some cds. I also picked up breaking bad series 1-3 for 20 squids which seemed a good price.
CunningSmile on 15 Jan '13 said:
They originally closed the one in the Darth Mall (Westquay) in favour of one tucked around a side street that no one can ever find, but just before Christmas they swapped. Wonder which set of staff ended up out of work?
Plamsa wing on 15 Jan '13 said:
Last time I went into HMV was the one in Wakefield, that was two years ago, didn't even buy anything. As of late they've been quite tight on their prices, reminds of Morrisons selling games down here.
Haven't actually bought anything from them since the Colour of Magic came out on DVD and I bought the 2 disc edition.
Pretty sure Zavvi were cheaper when they first popped up.
Bad news for the staff with their jobs at risk, but HMV have had it coming really.
RetroDad on 15 Jan '13 said:
In addition, the pester power of my kids, who do not understand the concept of saving or looking for deals elsewhere.
"But I bet this is cheaper online, can't you just wa-"
FishyGinger on 15 Jan '13 said:
That mall around the corner from forbidden planet (yes turns out the ladyfriend does want to spend hours looking at the books downstairs) is scary. Seems like the best place to sell your own organs. Only known the one in Darth Mall to be open. Along with the pointless HMV pop up.
Still, maybe HMV will have a sale. Hoping for up to and including 1% off.
GHOSTY05 on 15 Jan '13 said:
I do feel for the staff as it now seems i am in the same situation.
I have just been given 6 months notice of possible redundancy after 8 years working at the same place on a great wage, looks like i wont be buying the new xbox this year!
Very depressing i can tell you that now!
FishyGinger on 15 Jan '13 said:
Balls, unlucky chum
SilentDark on 15 Jan '13 said:
No real surprise, as with most other companies that went under it was generally a case of startlingly poor management, greed and that almost child like faith in their own invincibility.
It would be funny, if not for the people who will suffer because of it.
Good luck to all the staff facing redundancy at this time.
CunningSmile on 15 Jan '13 said:
Bad luck mate, hope you manage to find something else quickly
Sandbwoy on 15 Jan '13 said:
I've got a feeling that HMV will survive this. Personally I don't buy games from there due to other places being cheaper, but I still buy CD's from HMV because I prefer to have an actual physical copy rather than a digital download. I'm sure there's a lot of people that want to see them pull through, and hopefully they will.
Clanger67 on 15 Jan '13 said:
Bad news Ghosty hope you manage to sort something out.My mate got laid off two years ago from a job he had been in since we left school.He has had trouble getting anything else and was thinking of going on a course to be a park ranger but the council has cut the funding.
GHOSTY05 on 15 Jan '13 said:
Thanks all, its one of those things, you never think its going to happen to you until it does!
It may still not happen as its only at risk, its not actual notice of redundancy, so i am just hoping things work out.
But its still on your mind, i am stressed about going from almost £30k a year to some minimum wage agency job.
Metalrodent on 15 Jan '13 said:
HMV was the only reason I ever went to my local shopping centre, sure prices weren't the best but I could spend ages standing in there looking for at their stuff (I was blessed by an HMV with a decent metal section). Internet shopping is conveniant and often cheaper yes, but not as fun or interesting (and the fact you can't see what you're buying).
Decent_Jam on 15 Jan '13 said:
Best of luck Ghosty, there's a lot of change in my organisation too so I know what it's like to be in the boat of uncertainty.
I am really annoyed with SOD's law today, since it says that today, the day I planned to go to HMV to spend the last of my Christmas gift cards, is the day they would stop accepting them. Very very annoying.
I'm just glad I didn't have all the ones left from my birthday, which I spent just before Christmas, otherwise I'd be even more annoyed.
If they do disappear, I honestly don't know what people are going to get me for my birthday anymore.
Obviously, in context, this is a small concern, and the best of wishes to the staff (well, certainly, the decent staff anyway).
I hope they are bought because if they go then I'll have nowhere to browse when I actually find myself out in a town centre, GAME is no fun to browse at all. Someone laughed at me for suggesting they will announce the new Xbox in the next few months earlier on.
ChillieBonBon on 15 Jan '13 said:
I hope things pan out for you Ghost, seeing as its uncertain, there might be nought to worry about.
I always liked having a look around HMV, even if I didn't get anything, it was a good way to pass the time. To hear that its going under will most likely be bad news for everyone. It seems that I will have to buy my games from GAME this year.