Is it the end of HMV?

Bosses of high-street music retailer, HMV, have announced that the company will be entering administration for the second time in six years, further to a sharp collapse in sales over the Christmas, representing the first big name retail casualty in 2019. They are Britain’s last surviving national music retailer, having been in business for 97 years.

The High Court have appointed KPMG to run the business, who will attempt to keep all 125 stores open while a buyer is sought, hopefully saving the more than 2,200 jobs that are at risk.

The retailer accounts for almost a third of all physical music sales in the U.K. and a quarter of all DVD and Blu-ray sales.  Although HMV had consistently grown their online sales, the business had little chance of being able to compete with the new digital era for music and film.  With platforms such as Spotify offering unlimited music for under £10 a month and the popularity of other subscription-based streaming services such as Netflix and Amazon Prime growing indefinitely, it is not a huge shock that HMV has been hit extremely hard and it is difficult to see how it could have been prevented.  The toxic mix of digital disruption and high business rates, costing the company in excess of £15m annually, has ultimately proved to be fatal for one of the U.K.’s biggest household names.

KPMG will have a tough job on their hands trying to sell the company.  Indeed, HMV only possess c. £1m of property assets and with the uncertainty of Brexit lying ahead, investing in this dying market would be a risky move for any potential buyer. 

HMV have announced that they will still be accepting gift cards and returns.  However, it has been advised that if you have a gift card then use it sooner rather than later as a decision may still be made to not accept gift cards or returns in order to save the company.