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.
gazzagb
Feel sorry for the employees, but it’s hardly surprising considering how expensive HMV was. Hopefully they’ll be giving away stock dirt cheap soonish!
Nickboss1
I Just got back from HMV picadilly. I thought I could get rid of my vouchers but unfortunatly I was told that they are worthless untill further notice and they are not taking any games for trade in.
The Stuff looked like they were close to tears.
Terrible.
Moshbag
I’ll just have to buy my DVDs and games in the pound shop that inevitably moves into the premises. No, wait…
Peter Chapman
Incidentally, I suspect a similar fate is looming for Argos and Homebase, too. Boots can’t be too far off, either? Thoroughly disheartening.
Nickboss1
Where will I buy my PS4 from now?
Peter Chapman
Amazon or Tesco by the looks of things!
tactical20
I was just having this conversation with the wife. We came up with Argos, Homebase, Boots, Superdrug, WH Smith, JJB Sports & Currys/PC World.
Peter Chapman
Argos and Homebase are the same company, I think. I vaguely remember reading something about each of their stores making an average profit of something silly like £100 per week.
JJB almost went last year, didn’t they? They closed down some stores and laid off some staff to limp into recovery if I remember correctly.
Boots just had a good year in Ireland but they seem the sort of big, overhead-heavy retailer who are all struggling a bit these days. Same applies to Superdrug, although I’m not sure how healthy the “15-year-old girls buying Impulse body spray and glittery lip gloss” market is.
WH Smith just closed their (only) store in Belfast last year so now the only one in Northern Ireland is in the airport! Not sure how indicative that is of the rest of the country though.
Currys and PC World are part of Dixons Retail Group, they went through all this about ten years ago, if I remember correctly. Hopefully they’re in good shape, as much as I dislike them, there’s literally nowhere else to buy the sort of things they sell anywhere near me!
No matter what way you look at it, though, the High Street is gasping its last breaths. It’ll all be banks, estate agents and coffee shops as far as the eye can see soon enough.
Mike
You’re correct, Peter – Argos and Homebase are owned by the same company.
Currys/PC World have been very lucky with Comet collapsing as now they have a monopoly within the market. I was with my parents in Currys the other day and we were talking to an employee who my mum knows and she said they were extremely close to administration last year but instead Comet beat them to it.
And don’t forget Charity Shops littering the high street lol
Dom El
Terribly sad times, especially as a number of friends work for HMV. They’ve worked their arses off over Christmas, and at least in the case of their store there were certainly a lot of customers still queuing up to spend in there.
Sadly though when online retailers have better prices, combined with people having less money than ever, it’s no surprise that more and more people are choosing the cheaper option.
I hope that a buyer can be found who has an answer to their issues as the British high street is becoming a bleak place.
OnlineAssassin77
Sad times sad times :(