PAUSED
DOUBLE CLICK TO RESUME
LOADING
HMV files for bankruptcy
The 98-year-old retail icon has filed for bankruptcy twice in 6 years

HIS MASTER'S VOICE COULD BE ABOUT TO SAY IT'S FINAL WORDS


British retail chain His Master's Voice, better known as HMV, has filed for bankruptcy.

The store, which first opened in 1919, blamed "a tsunami of challenges"  and "an erratic change in customer behavior" on the decision.

The chain, which has 125 stores, specializes in selling CDs and DVDs; two items which have almost become extinct with the rise of online streaming.

KPMG, who have taken control of the company during bankruptcy, said the following in a statement:

“Whilst we understand that HMV has continued to outperform the overall market decline in physical music and visual sales, as well as growing a profitable e-commerce business, the company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industry. This has been in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures.  Over the coming weeks, we will endeavor to continue to operate all stores as a going concern while we assess options for the business, including a possible sale. Customers with gift cards are advised that the cards will be honored as usual, while the business continues to trade.”


It stresses that HMV stores will still honor gift cards, something which wasn't done during the company's first bankruptcy in 2013, and was heavily criticized. Despite this decision, consumer groups such as Which? have advised gift card holders to spend them as soon as possible, as the company may not be around for much longer.

HMV's haunted history


The company first filed for bankruptcy in 2013 after a difficult Christmas period, which many retailers count on to bring their overall profits up.

Deloitte, the company's previous administrators, closed 66 of the company's stores, before selling the remaining assets to Hilco Group, who succeeded in executing a dramatic turnaround plan, which generated the company an unexpected profit of £17 million in the year it exited bankruptcy, making it the second largest music retailer behind Amazon.

Acquisitions of competitors, such as Fopp and Xtra Vision, appeared to show the company was stable, and had been boosted by the new popularity of vinyl.

However, the massive retail catastrophe of 2018, which killed off retailers seen as unstoppable such as Toys 'R' Us and Poundworld, reversed Hilco's progress, and created a black hole in HMV's finances.

A poor Christmas period toppled the company, causing it to call in administrators.

HMV's demise is mainly down to the sudden popularity of online streaming services, such as Netflix and Spotify, and the death of CDs and DVDs. Many of HMV's competitors, such as Best Buy and John Lewis, have stopped selling CDs and DVDs in their stores. However, the suspension of CD and DVD sales would result in HMV having to exit it's only market.

When's the last time you went to HMV? What do you think about this? 
Let us know in the comments below!


Comments