250 stores at risk as HMV heads into administration

250 stores at risk as HMV heads into administration

15 January, 2013
by: Spoonfed Team

Every dog has its day...

After selling off most of its live venues back in December the HMV Group have today announced that the retail arm of the company will be going into administration following a lengthy period of financial difficulties.

The first signs of the music, DVD and game retailer's imminent demise came back at the beginning of 2011 when it was announced there would be significant downsizing and store closures as a result of disappointing takings over the 2010 Christmas period and an ongoing decline in sales.

Since that time, the retail firm has remained in state of financial unsurety, and admitted as recently as last month that it would be unable to meet the covenant tests linked to its sizable bank loans later this month. Reports suggest that before the decision to go into administration went ahead, HMV management were in frantic talks with money lenders, suppliers and even major record labels and DVD distributers seeking a way in which to restructure its finances.

Amidst the fallout of these failed negotiations, the HMV board released a statement last night saying that: “[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.”

What this will mean for the 4,500 employees, working across 250 HMV stores, is at this point an uncertainty, but it is definitely clear that the way in which music is distributed and sold on the high street will be subject to change.

Whilst the final fate of the HMV stores might not come as a surprise to many, it is still a great shame that the last surviving high street retailer of its kind has finally reached the end of its tether. But as the saying goes, every dog has its day.

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Spoonfed Team