Day the music died
2000 jobs at risk as HMV fail for second time in six years
MUSIC giants HMV are on the brink of collapse for the second time in six years, putting 2000 jobs at risk.
Bosses blamed a “tsunami of challenges” after yesterday confirming they’d called in administrators.
The firm, with 125 shops, have been hammered by online streaming services such as Amazon, Apple and Netflix.
Nationally, demand for DVDs in the Christmas run-up crashed by a third.
HMV also cited hefty costs, including £15million a year business rates.
They have yet to formally enter administration.
In January 2013, HMV were saved by restructuring firm Hilco Capital, who this year rescued Homebase.
Paul McGowan, HMV and Hilco chief executive, said: “Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”
HMV’s problems come despite selling 31 per cent of all physical music in the UK in 2018 and 23 per cent of all DVD and Blu-ray, with their market share growing throughout the year.
Their expected demise threatens shockwaves for suppliers. They say they paid £1.3billion to UK music labels and movie studios in the past six years. HMV’s woes cap one of the worst years in living memory for the high street, with about 150,000 jobs lost. There are fears for a number of other retailers, including Debenhams. They are due to reveal their Christmas sales figures on January 10, the same day as struggling Mothercare, Marks & Spencer and Card Factory. Others set to announce results next month after tough trading include Moss Bros, Dixons Carphone, Carpetright and Game Digital. High street stores – battling online shopping, higher costs and low consumer confidence over Brexit – have been slashing prices after brutal trading in November and early December failed to lure shoppers. HMV lost £8.8million last year as sales fell nearly eight per cent to £277million. Amazon and Apple have been slated over their tax affairs, while Netflix confirmed their UK accounts were “under examination” by HMRC. Richard Lim, of industry experts Retail Economics, spoke of a “perfect storm” of distress for retailers. He added: “It’s clear consumer confidence is fragile and shoppers’ propensity to spend is weak.”