HMV to go into administration

The chain is refused a £300 million loan to keep it afloat

HMV to go into administration

Photo: PA

High street music, DVD and computer games retailer HMV has confirmed that it is going into administration.

A statement released overnight reads: "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."

The Financial Times wrote that the chain's suppliers, including record labels, computer games makers and film companies, recently refused to give the business a £300 million loan to keep them afloat.

The money would have gone to paying off the company's debt as well as to helping change the way the business is run.

Over 4,000 jobs are now at risk as administrators Deloitte attempt to seek a buyer for the company and secure a long term future for the high street retailer, which has around 250 branches nationwide. Branches will no longer accept gift cards/vouchers or issue them, as confirmed this morning (Jan 15).

One of the biggest worries for many in the music industry is how the demise of HMV could affect independent labels. With few small shops outside of major cities left, the retailer is a vital life source for smaller bands and artists hoping to have their music distributed nationwide. In fact, 38% of physical music on the high street is sold through HMV. Posting on Twitter, former Rough Trade East manager Spencer Hickman shared the fact that "in the UK in 2012 94% of video revenue, 65% of games revenue and 62% of music revenue came on physical formats," a worrying statistic for the music industry facing a future with limited visibility on the high street.

The Guardian suggests that restructuring company Hilco could be a potential life line for the debt-ridden company. Hilco purchased the Canadian arm of HMV in 2011 and beat sales targets over Christmas, making £40.5m over the festive period.

Meanwhile, writing for the BBC, Robert Peston states: "The outlook looks considerably better than for other recently kaput store groups. And the reason, according to influential sources close to HMV, is that the music industry and the film industry want its survival, albeit they recognise that will have to be with fewer stores and with fewer locations. Record labels and DVD distributors don't want to be wholly dependent for sales on Amazon and Apple's iTunes. So Deloitte is working on the assumption that these important suppliers will help the creation of a slimmed-down and viable HMV."

"This is unlikely to involve these suppliers actually buying HMV out of administration. Much more likely is that they would provide easy credit terms to a buyer - which will very likely be a private equity group (right now, again, there is too much money in private equity chasing too few deals)."

At the end of last year, HMV sold its live music assets to a the private equity arm of Lloyds Banking Group in a £7.3 million deal. HMV purchased MAMA Group in 2010 for £46 million but offloaded a number of venues - including the London establishments the Barfly and Jazz Café, the Manchester Ritz and Lovebox festival – to offload its debts. The sale also included the Great Escape and Global Gathering festivals and HMV's 50% interest in its Mean Fiddler joint venture with MAMA. HMV sold another of its live music ventures, the Hammersmith Apollo, in a £32 million deal in 2012.

See below for Twitter users memories of HMV.

Read More On This Artist

More News
Metronomy, The Horrors, Drenge to support Blur at Hyde Park
Kanye West cries on Radio 1: 'That's never happened to me in an interview before'
Will Smith has recorded 'seven or eight' songs with Kanye West
D'Angelo, A$AP Rocky, Father John Misty added to Open'er Festival line-up
Father John Misty adds second Shepherd's Bush Empire show
The Cribs declare that 'punk rock and indie are dead' - watch
James Bay on accusations pop is getting 'boring' : 'Sometimes music isn't...
Ed Sheeran on accepting Brit Award from Russell Crowe: 'I wanted to start quoting...
Paloma Faith says festival bosses have a 'responsibility to show diversity' – watch
Mark Ronson on Brit Awards win: 'I didn't even know we were eligible'
Royal Blood to 'cut Brit Award in half' and share Best Group statue
Kanye West moved to tears during upcoming interview with Zane Lowe
Brit Awards TV audience increases to 5.8m
Noel Gallagher: 'I was fucking heartbroken when I found out Jake Bugg uses a co-writer'
Albums and singles to be released on Fridays under new global plans
Death From Above 1979 pay tribute to the UK during thunderous NME Awards show
Music world reacts to Madonna's fall during her performance at the Brit Awards
Robin Thicke sings medley of U2 and Beatles hits in court during 'Blurred Lines trial
ITV defends decision to censor Kanye West's Brit Awards performance
Midweek Chart Update: Led Zeppelin at Number One with 'Physical Graffiti' reissue
Police confirm Cliff Richard investigation has 'expanded significantly'
Billy Corgan calls for rock stars to take 'aggressive' stance against pop music

More News


Please login to add your comment.

Latest Tickets - Booking Now
Know Your NME

NME Store & Framed Prints
Inside NME.COM