bit-tech.net

HMV headed for administration

Published on 16th January 2013 by David Hing

HMV was first established in 1921 but has struggled against online competition in recent years.

HMV is the latest casualty of the high street as it is set to go into administration following a refused request for funding.

According to the Financial Times, HMV requested £300m in funds from its suppliers which was refused. Last month, the same suppliers granted the 239 store chain £40m in backing despite its market value only being £14m.

Deloitte has been appointed as the company's administrator and shares in HMV will be suspended. Deloitte and HMV will be attempting to find a buyer for the business but at present, approximately 4,000 jobs are at risk.

'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,' reads a statement from the chain.

Speculation has been mounting that the store was in trouble following the announcement of a month-long 25% off sale, suggesting that it had not performed well over the Christmas period. Deloitte will be keeping the stores open whilst they seek a potential buyer.

HMV first opened its doors in 1921 with its flagship Oxford Street store but has, like many of its competitors, been struggling against online stores in recent years. In 2011, it sold off the Waterstone's chain for £53m to Russian billionaire Alexander Mamut.

HMV follows camera store Jessops, which went out of business last week and Comet which closed its doors at the end of last year. There is of course still the possibility that HMV and Deloitte will find a buyer in the same way that the Game Group managed to escape administration last April, being bought up by private investment firm OpCapita.

27 Comments

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The_Crapman 16th January 2013, 08:48

Balls. Where am I supposed to do my christmas shopping now!? Got a £15 voucher from swapping a blue ray set for a dvd set last weekend too, now all it's good for is a wallet sized ice scraper :-(

Si_the-dude 16th January 2013, 08:56

Quote:

Originally Posted by The_Crapman
Balls. Where am I supposed to do my christmas shopping now!? Got a £15 voucher from swapping a blue ray set for a dvd set last weekend too, now all it's good for is a wallet sized ice scraper :-(

Sorry to hear that, it sucks massively that they aren't honoring vouchers >:(

damien c 16th January 2013, 10:26

The voucher thing is the most annoying part about this I think, next to obviously people loosing there jobs.

Those vouchers would have been paid for previously so they have the money already from them, unyet they are not willing to allow you to spend a voucher which you have already paid for.

I bet the bosses of HMV still got there massive bonuses and pay riser though.

The_Crapman 16th January 2013, 10:27

i think i'm going to go in, take £15 pounds worth of good and give them the card. They can try calling the police, but they stole from me first! lol

Snips 16th January 2013, 10:29

Hands up who didn't see the digital distribution boom coming?

steveo_mcg 16th January 2013, 11:01

They must have known this was on the cards, to take money for gift vouchers is dishonest at best. Problem is gift voucher holders are creditors and so take their place in the queue with all the other creditors and the less your owed the further back in the queue you are, given they owe millions, £15 is unlikely to see any return.

rollo 16th January 2013, 11:38

HMV will likely be brought out by the music studios who will do anything to stop amazon becoming the only importer of cds into the uk.

But half the jobs at least will go and id guess at least half of the shops as HMV is everywhere.

There 140mil + in debt so your £15 gift vouchers are not really going to be even in the list you will get pennys back for them most likely.

Anyone who has tech in the day to day lives knew that HMV was struggling in early December shares tumbled on news that they might not last the christmas. They were saved by a 40mil loan from the music industry then.

greigaitken 16th January 2013, 12:24

Retail always loses on price. Only businesses that can add enough extra value earn their place on the high st. I do though take exception to charity shops not having to pay business rates so they get discounted rents.

B1GBUD 16th January 2013, 12:41

Quote:

Originally Posted by The_Crapman
i think i'm going to go in, take £15 pounds worth of good and give them the card. They can try calling the police, but they stole from me first! lol

Sadly the law won't be on your side, sucks I know... I'd probably try the same myself but wouldn't want to get nicked for shoplifting.

Woodspoon 16th January 2013, 12:49

Waiting for the inevitable screams from the music industry of "it's piracy wot done it guvnor" or something similar.

Anfield 16th January 2013, 13:07

Somewhere between itunes, spotify, netflix and so on are some remaining scraps, not surprised its not enough to pay for a high profile retail presence. Plus in the UK there has in recent years also been a massive increase in 2nd hand trade of cds, dvds and games, while hmv joined in on the console games they never attempted to compete with shops selling ex rental and used music and dvds.

ArcAngeL 16th January 2013, 13:34

They had a store in Australia, it fell through pretty quickly when the iPod boom came, surely they knew it would happen. They should of changed market strategy when they could, or at least close up when they could walk away with a revenue.

oasked 16th January 2013, 21:00

Even though the majority of their stock was overpriced, this is a sad day. We need a prescence of this content on the high street, not just the bargain basement selection in the supermarket.

Having said that, I probably contributed to their downfall as I haven't bought much from them for years - too expensive compared to online. :(

Tangster 16th January 2013, 23:19

Quote:

Originally Posted by oasked
Even though the majority of their stock was overpriced, this is a sad day. We need a prescence of this content on the high street, not just the bargain basement selection in the supermarket.

Having said that, I probably contributed to their downfall as I haven't bought much from them for years - too expensive compared to online. :(

I've gotten some bargains from HMV before though. I got a friend a pair of D2ks to replace his beats for £150 last summer.

longweight 16th January 2013, 23:20

Quote:

Originally Posted by oasked
Even though the majority of their stock was overpriced, this is a sad day. We need a prescence of this content on the high street, not just the bargain basement selection in the supermarket.

Having said that, I probably contributed to their downfall as I haven't bought much from them for years - too expensive compared to online. :(

Why do we need them on the high street?

dynamis_dk 16th January 2013, 23:42

Can't say I'll loose sleep - people loosing jobs is never a good thing but as a store (as mentioned above) it was never very competitive on price and the only reason I've purchased from them in the past is they had two CD's I was struggling to find in 'hardcopy' at the time. (My Ruin and Tori Amos fyi)

I haven't read the full article linked... Its its still open I might wonder to my local branch (searching for sale stuff). I venture into the town centre to little these days it must have been 6 months since I walked past it so I'd have never noticed if its shutdown.

CrazyJoe 17th January 2013, 00:17

Quote:

Originally Posted by The_Crapman
i think i'm going to go in, take £15 pounds worth of good and give them the card. They can try calling the police, but they stole from me first! lol

Good idea, cause some hassle for the people behind the till who have done nothing wrong and will likely lose their jobs...

The_Crapman 17th January 2013, 00:41

Quote:

Originally Posted by CrazyJoe
Good idea, cause some hassle for the people behind the till who have done nothing wrong and will likely lose their jobs...

http://24.media.tumblr.com/tumblr_lyh6ehnbo01r9ynqzo1_500.jpg

Anfield 17th January 2013, 02:01

@longweight, because we all know they are the last chain selling such stuff, without them it will be even more female clothing / mobile phone shops versus everything else and the high street as a whole looses even more of its former appeal due to the lack of diversity.

LordPyrinc 17th January 2013, 06:50

I've gotta say when it comes to game purchases, I'm going online unless it's a must have it day one type of game. Big box stores over here, at least all that I have visited, keep rationing down the PC games to smaller and smaller shelves. Even so called game stores have relegated the PC games to a single shelf, many of the products old or used.

SexyHyde 17th January 2013, 06:57

Quote:

Originally Posted by Anfield
@longweight, because we all know they are the last chain selling such stuff, without them it will be even more female clothing / mobile phone shops versus everything else and the high street as a whole looses even more of its former appeal due to the lack of diversity.

Until they change the rates of city centre stores, so they can be more competitive, I just don't care. Hell its not like it's a family run shop - its a chain.

Harlequin 17th January 2013, 08:01

each time a shop leaves a big `centre` the owners look at increasing the rent , which in turn *can*force other marginal profit shops to also leave......

paying tax also helps *cough* amazon*cough*

from this I can see the death of the gift card/voucher

CrazyJoe 17th January 2013, 10:21

Quote:

Originally Posted by The_Crapman
http://24.media.tumblr.com/tumblr_lyh6ehnbo01r9ynqzo1_500.jpg

It's hard to tell these things over the interwebz, there are stupid people out there...

Riffler 17th January 2013, 11:56

Buying gift cards is never ever a good idea. They're not covered by financial laws and regulations and so mis-selling or outright fraud as in this case is possible and you are left with no recourse.

HMV's business model was only ever really viable because of its high street cartel power in the 80s and early 90s. As soon as the supermarkets moved into the CD market and undercut them they were doomed; online was the last nail.

Harlequin 17th January 2013, 12:05

united colours of beneton have moved out of brighton can see other clothing stores going the same way , cant compete on price with the ` buy a million or 6` supermarkets.

TheStockBroker 17th January 2013, 14:49

My local Jessops.

Good to see the staff took the whole thing in their stride...

http://i47.tinypic.com/2ilbzvt.jpg

The_Crapman 17th January 2013, 18:26

Quote: