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Thread: HMV on the brink of collapse - administrators appointed

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    Wayne's Avatar
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    by » Fri December 28th, 2018, 10:28

    For non-UK people, HMV is the largest high street music retailer in the UK.

    2,200 jobs at risk as HMV on brink of administration

    HMV, the music and entertainment retailer, is on the brink of administration for the second time in six years, Sky News learns

    HMV, Britain's biggest high street music retailer, is on the brink of becoming the first post-Christmas victim of Britain's brutal high street environment by collapsing into administration for the second time in six years.

    Sky News has learnt that HMV Retail filed a notice of intention to appoint administrators last week amid desperate last-ditch talks with suppliers.

    Sources said that the chain, which trades from 130 shops and employs about 2,200 people, had been in talks in recent days with leading names in the recorded music industry to seek financial support from them.

    However, those discussions are not thought to have produced sufficient assurances to underpin HMV's finances, casting doubt on the survival of a retail name due to mark its centenary in 2021.

    An announcement about KPMG's appointment as administrator is expected later on Friday, according to insiders.

    The disappearance of the last major specialist music retailer on the high street is something the ?record labels have been keen to avert for years.

    HMV, which was then a publicly traded company, fell into administration in January 2013.

    Hilco, which this year bought Homebase, purchased the group's debt and acquired the business in a? £50m deal.

    Music industry sources said the rise of streaming services had "decimated" HMV's business and made its future operation unsustainable.

    The chain's likely collapse into administration comes amid expectations of a bloody Christmas trading period for the retail industry, with sales having been impacted by last month's Black Friday promotional bonanza.

    2018 had already seen tens of thousands of jobs disappear from the high street following the collapse of Maplin, Poundworld and Toys R Us UK.

    Other retailers including Carpetright, Mothercare and New Look? have shed stores and jobs through agreements struck with creditors.

    Next will be the first of the major high street chains to update the City on its Christmas trading performance when it issues a statement on January 3.

    A report by the KPMG/Ipsos Retail Think Tank published this week said the sector would face renewed pressures this year because of shifts in consumer behaviour, an over-supply of shops, high levels of debt and the cost of regulation.

    Paul Martin, the UK head of retail at KPMG, said: "It is too easy to point the finger at Brexit as the singular cause of all the woes in the industry.

    "There is a much wider array of forces at play. These forces are by no means new."

    The news of HMV's impending collapse comes just two days after Jake Berry, the high streets minister, launched a £675m Future High Streets Fund? earmarked for modernising town centres across the UK.

    Coincidentally, the music and entertainment retailer's move to file for administration also comes within hours of a government announcement that it would seek to strengthen protection for consumers who prepay for products in the event of a company's insolvency.

    Retail sources cast doubt on the likelihood that a buyer would want to acquire the whole of HMV in its current form.

    Hilco and KPMG declined to comment on Friday.
    I’m not at all surprised, and I’m actually surprised that it’s lasted a further 6 years, but what a massive loss this will be - a staple of the British high street.

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    by » Fri December 28th, 2018, 10:47

    This is really sad news. HMV and Our Price were my two fav place to shop for singles and albums

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    by » Fri December 28th, 2018, 10:48

    Very sad news! Another iconic UK brand will (probably) disappear.
    I guess it's a sign of the current times.

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    by » Fri December 28th, 2018, 10:55

    Very sad but also who actually buys CDs anymore?
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    by » Fri December 28th, 2018, 11:07

    HMV was never the place to buy new albums for me as online was always cheaper, I only went their for the older classics that were on offer. Sadly they cannot compete with immediately streaming any music you want from the comfort of your own bed.

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    by » Fri December 28th, 2018, 11:12

    Cruel, but it's the reality of ever changing market and it might happen to any of us.
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    by » Fri December 28th, 2018, 11:14

    Quote Originally Posted by Serby
    Cruel, but it's the reality of ever changing market and it might happen to any of us.
    That I disappear because people don't want to buy me any longer?

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    by » Fri December 28th, 2018, 11:35

    Oh, not again. But the reality is everything they sell is streamed now - be it music, movies or TV shows. I honestly couldn’t tell you the last time I went and bought something there though... unfortunately they are a victim of the times and if your business has outlived the demand, this is the only course of action I’m afraid.
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    by » Fri December 28th, 2018, 11:45

    I can't believe it would celebrate its 100th birthday in 2021 - what an established brand it is.

    I don't understand where this has come from - in its last report, it stated sales (whilst they did fall) were £290 million (with a profit of £8 million). It must have really high levels of unstructured debt or it's cost not be tenable for the coming year.

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    by » Fri December 28th, 2018, 11:51

    CDs and DVDs are dead and buried, which makes up a bulk of their stock. The only thing that's kept them going this long is the vinyl revival and video games. Funnily enough, I have actually visited HMV more in the last 12 months since acquiring a turntable than I had in the ten years previous!

    I think a big reason they've not been able to keep afloat is their online presence - it's so weak. Their website is confusing, is it a news website or a shop? If they'd had a strong online model akin to Amazon, maybe they'd have been able to support their stores for longer.

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    by » Fri December 28th, 2018, 11:55

    ^ I agree. They haven’t evolved enough in this era of modern technology to sustain themselves as a viable business so this news doesn’t shock me too much.

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    by » Fri December 28th, 2018, 12:02

    HMV was such a strong brand 15 years ago, it was always busy, but CD's and DVD's are just not big sellers anymore. Their video game area (at my store anyway) is pretty sad. They do have some good tech section and merch area, but it's not priced competitively, I bought one of those "Pop" figures for a Christmas present for £16 and then found it at £10 at Forbidden Planet.

    If I remember right, when they were brought out of administration before, it was without trading through a website, they went to instore only, and the website never really got going again.

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    by » Fri December 28th, 2018, 13:03

    wait... I can understand the drop of CD sales... but DVD sales are down as well? DVDs are the greatest thing ever (including blu-ray).

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    by » Fri December 28th, 2018, 13:15

    Live in a cave or...?

    Both CDs and DVDs are utterly dead.
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    by » Fri December 28th, 2018, 13:39

    Why would DVD sales not die either?

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    by » Fri December 28th, 2018, 15:35

    I remember that years ago, people would say that the different formats (physical, digital sales, streaming) could coexist because of different consuming habits. Seems like the sceptics had a point back then. I like physical copies of albums, making it sad that there are less options to purchase them in real, physical shops.

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    by » Fri December 28th, 2018, 21:35

    I'm sad for the people who will lose their jobs, but this isn't surprising at all.

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    by » Sat December 29th, 2018, 06:17

    HMV Canada collapsed in the spring of last year and I'm still not over it tbh lol.

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    by » Sat December 29th, 2018, 10:44

    Quote Originally Posted by Husbear
    https://www.theguardian.com/commentisfree/2018/dec/28/hmv-music-high-street-chains-record-shops

    Good explanation why this is happening
    That's a snobby article IMO.

    I think the primary reason for the decline of HMV, as that article references, is the decline in physical entertainment consumption. The reality is that HMV is a well run business, with increasing market share - the problem is that it's increasing market share on the back of declining sales in a shrinking market. And as I mentioned earlier, it has predicted that based on an industry projecting a 17% decline in 2019, it will not see the year out.

    It's crazy to think that just 8 short years ago, the company had revenues of £2 billion per year - so much has changed in that time.

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    by » Sat December 29th, 2018, 11:58

    Also HMV was a cool young people’s brand and now it’s the opposite as young people have grown up with Spotify, YouTube and Netflix

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    by » Sat December 29th, 2018, 13:24

    This is true, and young people don’t value physical media like people 30+ do.

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    by » Sun December 30th, 2018, 03:50

    I always wonder where and when the downwards trend will end. Like is there no bottom for physical media?

    Will we really see the day in which 0 copies are being sold? I have to admit that my pyhsical media consumption has drastically collapsed in the wake of becomng a Spotify premium member in April 2018... But I still bought like 40 CDs and 35+ DVDs this year.

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    by » Sun December 30th, 2018, 10:00

    This is really sad. Moreso for 30+ aged people. I remember that HMV was THE cool place to be around 15 years ago. I use to walk into one and spend hours just browsing. Hours. It was a fantastic pass-time. I could drown myself in viewing catalogues and even bought a few rarities which I never knew existed.

    I remember in 2000 where there was an HMV in London that was trying to get in on the digital life. They were allowing customers to select their own songs that could fit into an 80 minute CDR, and they would make your own CD playlist. I asked them about the copyright and legalities and they reckon it was all taken care off with the various music labels/distribution labels.

    I just dont think they realized how fantastic an idea this was back then.
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    by » Sun December 30th, 2018, 10:49

    This is so sad, but I think they will manage to stay alive! I certainly hope so. It's sad that the market for physical copies is dying.

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