Thousands of jobs at risk as HMV collapses
Retail giant HMV has fallen into administration for the second time in six years, putting 2,200 jobs at risk.
Britain's biggest CD, DVD and games chain confirmed it has appointed administrators amid desperate last-ditch talks with suppliers.
Holders of gift vouchers are being advised to consider spending them sooner rather than later.
It has become the first high street casualty after Christmas in what has been a tough year for the retail sector, which has been hit by falling consumer confidence and a rise in online shopping.
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HMV has more than 120 shops across the country, including in Shrewsbury, Telford, Wolverhampton, the Bull Ring in Birmingham and at intu Merry Hill shopping centre in Brierley Hill.
It is the second time it has collapsed in recent years, having filed for administration in 2013. It was eventually taken over by Hilco, which specialises in restructuring companies.
A weak Christmas, high business rates, weak consumer confidence and the rise of online streaming services have taken their toll on HMV.
The entertainment retailer confirmed it has appointed administrators from KPMG.
Paul McGowan, the executive chair of HMV and Hilco, said the decline in the UK CD and DVD market had made the situation impossible.
“During the key Christmas trading period the market for DVD fell by over 30 per cent 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 £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."
The failure of another major high street name before the year is up has capped a miserable 12 months for the retail sector.
The likes of Poundworld, Toys'R'Us and Maplin have all gone bust this year, while heavyweights Marks & Spencer and Debenhams have announced plans to shut hundreds of stores.
Several others – including Superdry, Carpetright and Card Factory – have all issued profits warnings.
High street retailers have been slashing prices after brutal trading in November and early December failed to lure shoppers to stores across the country.
