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HMV collapses into administration for second time in six years

HMV has appointed administrators at KPMG, putting more than 2,200 jobs at risk
HMV
HMV is in talks with suppliers and potential buyers

HMV has collapsed for the second time in six years after poor sales over the key Christmas trading period.

The music retailer has appointed administrators at KPMG, putting more than 2,200 jobs at risk. The company said 125 stores in the UK will remain open while talks with suppliers and potential buyers continued.

HMV collapsed into administration in 2013 when it was rescued by restructuring firm Hilco.

The company has been hit by slowing demand for CDs and DVDs as more consumers download content online.

Paul McGowan, the executive chair of HMV and Hilco, said: “During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, while HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.

“HMV has clearly not been insulated from the general malaise of the UK high street and has suffered the same challenges with business rates and other government-centric policies which have led to increased fixed costs in the business.

“Business rates alone represent an annual cost to HMV in excess of £15mln. 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.”

On top of a challenging market for CDs and DVDs, the group has also been affected by a wider downturn on the UK high street as more consumers shop online and reign in spending amid Brexit uncertainty.

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