HMV Poised To Call In Administrators
Directors of HMV are this evening locked in talks about the retailer's future amid growing concern that it could become the latest big-name high street chain to succumb to the flat-lining British economy.
I have learned that the board of HMV has been meeting today to thrash out options for the company, which are said to include a possible plan to call in administrators.
People close to the situation said that a number of options remained under consideration and that any announcement about a board decision was unlikely until later on Monday or Tuesday. It remains conceivable that HMV's lenders or another party will ride to its rescue and avert the need to appoint administrators.
If HMV did concede defeat in its attempt to trade itself back to health by calling in administrators, it would deal a devastating symbolic blow to the future of the British high street.
It would also put more than 4,000 jobs at risk, just days after the camera retailer Jessops announced its demise, with the closure of nearly 200 shops and the loss of almost 2,000 jobs.
HMV is run by Trevor Moore, who recently took over having held the chief executive's post at Jessops.
If administrators are called in, the retailer's board would probably hire either Deloitte or KPMG, two of the big four accounting firms, to oversee the process, according to people close to the situation.
Some of HMV's 230 UK stores could yet be saved from closure if the company manages to attract a bidder. However, analysts have said for some time that a viable HMV is likely to involve a significantly smaller number of shops trading on UK high streets.
Apollo Management, the US-based investment firm, has been acquiring some of HMV's debt from its lenders and was reported last month to be keen on a takeover of the company. Reports today suggested that it was no longer interested in buying HMV.
HMV has been the subject of periodic speculation that it would fall into administration for several years as it faced increasingly intense competition from supermarkets as well as online retailers such as Amazon.
Its shares, already close to having negligible value, were further hit just before Christmas when the company warned that it risked breaching its banking covenants at the end of January, blaming poor sales in the run-up to Christmas.
The company has not yet disclosed its trading performance during the crucial festive period although a decision last week to launch a huge sale across its product range reignited fears - denied by HMV - that it was running short of cash.
HMV insiders said the company has been considering updating the market next week on Christmas trading.
HMV has raised tens of millions of pounds by selling assets including the Hammersmith Apollo music venue and the Waterstone's bookseller in an effort to buy itself more time to execute a turnaround strategy devised by Simon Fox, Mr Moore's predecessor.
The music industry's biggest companies have also chipped in to help prolong HMV's future, participating in a new financing package last year.
The prospective administration of HMV is politically complicated by the fact that the company's two biggest lenders are Lloyds Banking Group and Royal Bank of Scotland, which both count the British taxpayer as their largest shareholder.
HMV traces its heritage back to 1921, when Sir Edward Elgar, the renowned composer and conductor, opened its first store on London's Oxford Street.
HMV declined to comment on Monday evening.
what do you think?
Hardly a big surprise. Young people do not buy enough CD/DVD to make it worthwhile. Downloading music is the future and it is now legal. Maybe a few bigger outlets could survive but yet again the Internet will claim another scalp. Why pay to go into town or pay parking fees when you can sit at home and order from Amazon and have it delivered for free. Sorry HMV but it appears your time is up
Hope they find a buyer, our son works for them him and his wife are expecting their first baby this July.
Totally agree with you Andy, i buy near enough everything online now because its cheaper & easier to download music & films straight to your laptop rather than go out and buy it at a shop
True, Andy. I hate to say this, but our town centres are heading into the history books. The shops cannot compete with the internet because of high overheads and punitive taxes and customers cannot be exoected to tolerate any longer the rip off parking charges and fines.
Internet retailers maybe cheaper now but once they have wiped out the high st stores watch their prices soar. I do agree that greedy councils are are also speeding up the death of the high st. with sky high parking charges
Absolutely right, Nigel. And as the Government loses revenue from shop closures it is only a matter of time before they introduce a higher rate of VAT on online sales. I bet they are working on it right now.
And the reason it is cheaper is because they use tax loopholes to pay little corporation tax. So I hope the few extra quid saved will be worth it.
Diane. I am sorry to hear that. It certainly brings these business failures a bit closer to home when someone you know is at the sharp end of it
This comment has been removed for violations of our Terms and Conditions.
This comment has been removed for violations of our Terms and Conditions.
I went to buy a tv on Saturday..! And discovered that the set I wanted was almost £150 cheaper on line..,! Did I buy did I hell. And people wonder why the shopping high street is disappointing in front of are eyes..! And I can even pick it up at the shop it was £150 more expensive at..?? doesn't make sense..?? lol.
Pps disappearing it should have said..!! lol. ;)
Lol I don't think the staff of hmv will LOL when they loose there jobs typical attitude of 95% of people don't affect my life remind me to LOL you if u loose your job c how u like it as this affects my wife who works for hmv
Well said Paul, as I said our son works for them he and his wife are expecting their first baby in July.Bet tbe public secter won't worry will they
feel for you diane and your family, but dont.have a go at public sector workers. im a nurse, pay pension, tax, ni contributions.sick of people having a go all the time
Andrea nothing personal but public sector workers want the rest of us to support them but it does not go the other way,
Andrea, my wife is only alive today because of the skill and professionalism of NHS staff. They deserve everything they are paid and more.
who supports us. ive paid into a pension for 30 years, national ins for my state pension. why do private sector workers think.they are hard done by.
Diane, I feel for all the people who may lose their jobs, but don't use it as an opportunity to slag off the public sector employees, many, many of whom have lost their jobs too. As i've said before to you, the public sector employees are more organised and unionised than the private sector. I would be happy to support any action taken by the private sector, but they don't tend to organise themselves. Stop dividing people
Can I ask what you do for a living
Darren, many people may lose their jobs, Your flippancy is a bit offensive to them
Louisa. Pity he dosen't care as much about those people losing their jobs as he did about Rooneys sister in law
Dave . That wouldn't be you stirring it now, would it? Tut tut!
Me Louisa ! Perish the thought
When you all want a shop to go to remember these days,Rumours are play.com are in trouble
Ye ye ye
NOOOOOOOOOOOOOOOOOOO!!!!!!!!!!!! Not HMV!
This is happening too often. We'll have nothing left.
We will have supermarkets who will supply your every need - at a very high price. And you will have to serve yourself.
What you mean 'have' nothing left?. we dont own anything as it is lol
Lets hope the remaining indepedent record shops who survived the days of HMV can still battle on strongly. A cd looks a lot better in a collection that a file on a computer.
You dont get the album art work on a downloaded file either. One of the things i love about buying CDs is that you can read the booklet or buy special editions of the album. I once bought a bullet for my valentine album in usb flash drive version. It was in the shape of a bullet but all the artwork and lyric pages were in PDF version and it just didnt have the same feel to it as a cd would
I've got mixed feelings. I come from the vinyl generation and agree about the artwork etc. However having been burgled and been unable to replace some of my stuff because I can't find it anywhere I can't help but think that at least my cyber collection is safe and well protected. Plus being able to take my music which has given me the most pleasure and joy anywhere thanks to online and iPods etc is a real boon. It doesn't help those people whose jobs are in jeopardy I know but then no-one's job is safe these days.
it's been apparent for some years that the high street retail outlets have been struggling against on-line sellers, download or mail order. my local branch turned its main floors over to gaming and DVD/blu-ray, and moved the CDs to the basement; I was happy, as the prices went down with the elevation and it was nice and cool in the summer! I am of a generation that readily transferred its musical affections from vinyl to polycarbonate whilst retaining some nostalgia for the former format. many others insist that vinyl is audibly superior; they're probably buying it mostly online now anyway. do young people now know or even care what HMV stands for? the logo is still a gramophone and attentive dog. I'll be visiting that basement as long as it's there; best of luck, His master's Voice....