At a hearing before a high court judge late this evening (28 December 2018), Will Wright, Neil Gostelow and David Pike from KPMG’s Restructuring practice were confirmed as joint administrators to HMV Retail Limited and HMV Ecommerce Limited, the entertainment retailer.
The company operates 128 stores across the UK including nine which operate under the Fopp brand, and employs approximately 2,000 permanent staff. The joint administrators will continue to trade the business as a going concern while they assess options for the business, including exploring the possibility of a sale as a going concern.
HMV was founded in 1921 and over 97 years, has sold a range of products including audio, books, CDs, DVDs, video games, as well as an increasing range of movie, television and music merchandise.
Wright, partner at KPMG and joint administrator, said: “For decades, HMV has been one of the most iconic names on the high street. 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 e-commerce 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.”
Richard Lim, chief executive, Retail Economics said: “Poor Christmas trading has claimed its first victim as the industry continues to adapt to seismic structural shifts in consumer behaviour, fiercer competitor dynamics and spiralling operating costs. Set against the backdrop of turbulent political and economic undercurrents, this perfect storm of pressures has intensified into a year of distress for the industry. While it is too early to assess the relative success of Christmas trading, it’s clear that consumer confidence is fragile and shoppers’ propensity to spend is weak.
“The fast-paced evolution of consumer preferences has left retailers struggling to adapt business models swiftly enough to meet customer’s heightened expectations. A laser-like focus on strategic transformation will emerge as the overriding priority for many retailers heading into 2019.”