HMV collapses into administration putting 2,000 jobs at risk

Company operates from nearly 130 stores across the UK, including nine Fopp stores

HMV has collapsed into administration, putting 2,000 jobs at risk.

Administrators KPMG have been appointed to HMV following a hearing before a High Court judge on Friday evening.

Will Wright, partner at KPMG and joint administrator, said: “Whilst we understand that it has continued to outperform the overall market decline in physical music and visual sales, as well as growing a profitable ecommerce business, the company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industry.

“This has been in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures.

“Over the coming weeks, we will endeavour to continue to operate all stores as a going concern while we assess options for the business, including a possible sale.

“Customers with gift cards are advised that the cards will be honoured as usual, while the business continues to trade.”

This is the second time the company has collapsed, having gone into administration in 2013 amid rising competition from music streaming services.

The one-time high street stalwart was bought by Hilco in a £50m deal at the time, which saved 140 of its 230 stores, with 15 closing since then.

Paul McGowan, executive chair of both Hilco and HMV, said: “In the six years since the HMV business was rescued from a previous administration process the entire team has been immensely hardworking and engaged with the business and has captured market share from all of its competitors.

“As such, it is disappointing to see the market, particularly for DVD, deteriorate so rapidly in the last 12 months as consumers switch at an ever increasing pace to digital services.”

The news of HMV’s difficulties comes after a year of increasing trouble on the UK’s high streets, with a number of high profile brands forced to close stores as they battle financial problems and a decline in consumer spending.

House of Fraser collapsed into administration in August and was subsequently bought by Sports Direct founder Mike Ashley, but he has been unable to save all stores.

In addition Mothercare announced earlier this year that it would close 50 stores under a CVA aimed at cutting costs, and Marks and Spencer said it would close 100 shops over the next four years.

Meanwhile, in another sign of the growing retail crisis, the number of shoppers heading to UK stores on Boxing Day fell for the third year in a row, according to the latest figures from consultancy Springboard.