HMV, the music retailer which has dominated the UK retail scene for a number of years, has gone into administration for the second time in six years.
The company, which as 128 stores nationwide, will see in excess of 2,200 jobs at risk after they appointed administrators at KPMG following a hugely disappointing Christmas in sales.
Having been rescued by restructuring firm Hilco in 2013 following its first collapse and Paul McGowan, the executive of HMV and Hilco has put the blame on the decline of the CD and DVD market as the cause and they got a corporate finance company to help.
“During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, while HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable,” McGowan said in a statement.
“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.”