×
You will be redirected back to your article in seconds

HMV seeks protection from insolvency

Online competish floors U.K. retail chain

LONDON

British music and entertainment retail chain HMV has sought insolvency protection by going into administration, the U.K. version of Chapter 11.

Following a board meeting Monday, the company, founded in 1921, announced that accountancy firm Deloitte would be appointed administrators.

The decision followed failed requests to HMV’s suppliers for £300 million ($481.8 million) in additional financing. The retailer owes $282.8 million to banks having struggled from the ever increasing competition from online sales.

The company has ceased trading on the London Stock Exchange, but Deloitte intends to keep HMV’s more than 230 stores in U.K. and Ireland open while it assesses business prospects and seeks potential buyers. More than 4,350 jobs are at risk.

U.K.-based private equity company Endless has already approached Deloitte with a view to purchasing HMV.

“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,” the HMV Group said in a statement.

All eyes have been on the struggling retail giant since it began a series of ultimately doomed efforts to turn around its business in 2007. As debts grew, the group sold off sections of its business in 2012, including its live entertainment arm, such as flagship venue Hammersmith Apollo, and book retailer Waterstones, which it had acquired in 1998.

The demise was signalled on Dec. 13 when the company announced it faced a possible breach of bank loan agreements. The same day HMV revealed its interim financial results for the 26 weeks ending Oct. 27, showing sales down 13.5% to $463.5 million, a total group loss after tax and exceptional items of $58 million and an underlying net debt of $282.8 million.

The failure follows in the footsteps of other entertainment retailers around the world including Tower Records and Virgin France, which filed for bankruptcy on Jan. 9.

Maureen Hinton, analyst from Verdict Research, told the BBC HMV was slow off the mark when it came to digital sales. “If it had gone online 10, 15 years ago, it’s got a very strong brand name, it could have built up a real presence. But at the moment if we think online you just think Amazon.”

According to Verdict, HMV’s share of the combined music and video market in the U.K., both physical and download, stood at 22.2% in 2012.

More Music

  • Camila Cabello

    Camila Cabello Reveals Podcast Obsessions, Teases New Album at Cannes Lions

    Camila Cabello was the featured speaker at a Tuesday afternoon panel at Cannes Lions, the annual gathering of marketing, design and entertainment professionals in the south of France. Joined by Spotify chief content officer Dawn Ostroff, the talk, moderated by Variety editor Shirley Halperin, was centered around the theme of the golden age of sound [...]

  • Plume of black smoke rising from

    Attorney for Universal Music Artists Impacted by 2008 Fire Requests Inventory

    Following on its statements last week that it will be filing a lawsuit on behalf of several Universal Music recording artists impacted by a 2008 fire that destroyed a huge number of master recordings, a Los Angeles law firm has requested a “complete inventory” from the company. Addressed to UMG CEO and chairman Lucian Grainge, [...]

  • Charles Caldas To Step Down as

    Charles Caldas To Step Down as Merlin CEO

    Charles Caldas, the only CEO that the independent-label collective Merlin has ever known, announced today that he will step down from his post at the end of 2019, after more than 12 years at the helm of the global rights organization. He will continue his current duties until then and work with the Merlin board to [...]

  • XXXTentacion

    Watch a Trailer for New XXXTentacion Documentary

    A year to the day after rapper XXXTentacion was murdered, his estate has released a trailer for an upcoming documentary on the artist, which the announcement says is “releasing soon.” The clip, which includes narration from X himself, captures quick flashes of him reuniting with family and friends, engaging with fans, and working on music. In the [...]

  • Editorial Use OnlyMandatory Credit: Photo by

    Ed Sheeran Adds Cardi B, Bruno Mars, Khalid, Eminem, H.E.R. to 'Collaborations' List

    With less than a month to go, Ed Sheeran has uncensored his list of duet partners on the “No.6 Collaborations Project” album that’s due out July 12 and, not surprisingly, Justin Bieber is far from the only superstar in the bunch. It’s heavy on urban music giants, with Travis Scott, Khalid, Eminem, Cardi B, Chance [...]

  • Meek Mill, Future to Co-Headline on

    Meek Mill, Future to Co-Headline Late Summer Amphitheater Tour

    Hip-hop stars Meek Mill and Future have announced what they’re billing as a fall tour — even though, technically, most of the dates fall in the final weeks of summer — that will bring them to 24 cities across the country, mostly in outdoor amphitheaters. The co-headlining outing starts August 28 in St. Louis at [...]

More From Our Brands

Access exclusive content