British music retailer, HMV has collapsed into administration for the second time in six years.
The iconic high street brand, which was founded 98 years ago by composer Edward Elgar, currently has 120 stores across the UK and employs 2,200 staff. It confirmed the appointment of KPMG as administrators at lunchtime on 28th December.
HMV has blamed tough competition from online retail and streaming services as the British high street continues to take a battering. In 2018 alone, other iconic household names have vanished from British high streets, including Toys R Us and Maplin Electronics.
HMV is the last remaining record chain operating in the UK, and its demise will certainly see a retail sector move squarely online, likely to not return to high streets up and down the country.
Paul McGowan, Executive Chairman of HMV and its owner Hilco Capital commented: “In the six years since the HMV business was rescued from a previous Administration process the entire team has been immensely hard-working 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.”
“Over the last six years HMV has successfully implemented systems to maintain the lowest possible cost base through consensual arrangements with landlords and the use of technology to reduce other operating costs in the business. However, during the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, whilst HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.”
“HMV has clearly not been insulated from the general malaise of the UK High Street and has suffered the same challenges with Business Rates and other government-centric policies which have led to increased fixed costs in the business. Business Rates alone represent an annual cost to HMV in excess of £15m. Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”