HMV has reportedly collapsed into administration for the second time in six years.
The UK’s largest high street music retailer was put into administration at the beginning of 2013, which caused them to switch up their approach to sales.
Turning their attention to online customers, the company later overtook Amazon on physical music sales, taking up 28% of the market.
However, it seems the stores and its employees could now be at risk as Sky News reports that HMV Retail filed a notice of intention to appoint administrators last week.
HMV currently has 125 shops and employs about 2,200 people. According to Sky News, the chain had been in talks in leading names in the recorded music industry to help with finances.
Speaking to Music Business World Wide, Paul McGowan, Executive Chairman of HMV and Hilco Capital, said: “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.”
KPMG has now been appointed administrator. The chain’s 125 UK stores will remain open while discussions continue.
The Canadian branch of the music and entertainment retailer – which opened its first store in the country in 1986 – was sold by HMV to retail restructuring specialist Hilco in 2011, after which it operated as an independent company from HMV in the UK.
After over 30 years in business, however, HMV Canada was put into receivership following the accumulation of huge losses in recent years. The decision from the Ontario Superior Court meant that the majority of its head office staff were made redundant, while all 102 of its stores closed.