UK music and entertainment retail chain has fallen into administration for the second time in six years.
At present, HMV employs roughly 2,200 people across 125 stores in the UK and has said it would continue to trade despite having an extremely weak Christmas footfall and deterioration in the UK market for CD and DVD.
Supposedly, HMV has had talks with major suppliers in the entertainment industry, with record labels keen to avert the disappearance of the last major specialist music retailer on the high street.
In January 2013, HMV fell into administration before being acquired by present owner Hilco in a £50 million deal.
Despite the ever-increasing switch to digital downloads, Executive Chairman, Paul McGowan, said efforts had been made to drive down costs through agreements with landlords and the use of technology.
Mr McGowan said: “However, during the key Christmas trading period the market for DVD fell by over 30 per cent compared to the previous year and, whilst HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.”
He added by saying that business had also suffered because of the “general malaise” affecting the high street, pointing in particular to its annual business rates bill of more than £15 million.
“Even an exceptionally well run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”
Taking all factors into consideration, HMV have done considerable well; it has sold 31 per cent of all physical music in the UK and 23 per cent of all DVD and Blu-ray. Moreover, HMV’s market share has grown month on month throughout the year.
Nevertheless, industry experts reached a consensus that by 2019 the market as a whole would fall by another 17 per cent.
Consequently, the Directors have concluded that it will not be possible to continue to trade the business.