HMV have been in trouble for a little while and warned last month that it was likely to breach banking covenants, but tonight it seems like the high street retailer is on the cusp of administration, with tomorrow morning penned in as the rather unfortunate end of the line.
Multiple sources are claiming that Deloitte have been appointed as administrators, with a statement due first thing in the morning.
HMV last Friday announced a ‘blue cross’ sale with some reasonable discounts to be found. This hasn’t made much impact, though – shares instantly dropped by a fifth despite claims that the promotion was nothing to do with ongoing negotiations.
4,350 jobs are at risk, according to The Telegraph, who says HMV have nearly 240 stores across the UK and have been going for over ninety years.
Our thoughts go out to those affected.
Update: it’s true. HMV have issued the following statement:
On 13 December 2012, the Company announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.
Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, the Board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect.
The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.
It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.
The Company’s ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect.