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HMV, One of UK's Largest Retailers of CDs, DVDs and Blu-rays, Calls in Administrators For Second Time in Six Years (bbc.com)

Posted by msmash on from the tussle-continues dept.

Retron shares a report: Music retailer HMV has confirmed it is calling in KPMG as administrators. The move, the second in six years, involves 2,200 staff at 125 stores. Owners Hilco, which took the company out of its first administration in 2013, blamed a "tsunami" of retail challenges, including business rate levels and the move to digital. It said the stores would continue to trade while negotiations were held with major suppliers and it looked for buyers. Paul McGowan, executive chairman of HMV and its owner Hilco Capital, said: "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."

He pointed out HMV sold 31% of all physical music in the UK in 2018 and 23% of all DVDs and Blu-rays, with its market share growing month by month throughout the year. But he added that the industry consensus was that the market would fall by another 17% during 2019 and therefore it would not be possible to continue to trade the business. Holders of gift vouchers are being advised to consider spending them sooner rather than later.

6 of 76 comments (clear)

  1. Ironic... by Retron · · Score: 4, Interesting

    The ironic thing with this story is that 13 years ago, before Spotify and the like, HMV offered digital downloads (as did many other shops, like Tesco and Virgin Records). The downloads were clunky, required Windows Media Player and if you stopped paying the monthly subscription you lost access to the downloads entirely - they'd just redirect you to a login screen if you tried playing them. I only lasted two months as a subscriber back in the day as I realised I'd be stuck paying £10/month forever just to keep access to the tracks I'd downloaded. I still have the (now useless) WMA files as a souvenir!

    The modern way of downloading music to keep (MP3s via Amazon, for example), is much better, as the music doesn't expire.

    1. Re:Ironic... by Duds · · Score: 3, Interesting

      There's so many of these retailers who could have owned the future if they got it right. Like you say, HMV was there first and just screwed up the mechanism and didn't support it fully.

      Same with Blockbuster, they had a DVD rental by post service in the UK when "LoveFilm" (now Amazon) and Netflix were just a fever dream, but they only did individual rentals and never promoted it for fear of cannibalising the stores (lol). They even made their own films, most notably the Charlize Theron/Christina Rici film "Monster". They had everything they needed to be 2018 netflix and they buggered it up horribly.

    2. Re:Ironic... by Anonymous Coward · · Score: 4, Insightful

      There was no way a smaller player like HMV was ever going to "get it right". People didn't want DRM files that were hard to play. The music industry wouldn't allow files without DRM. None of these small fry had a chance in hell of changing that. It took big players like Apple and the like to finally kick DRM out of the music market. These folks may have had part of the vision; they just had no chance at all of success due to scale and legal challenges.

  2. Re:In American, what's "calling in administrators" by Going_Digital · · Score: 4, Informative

    It is essentially the same as Chapter 11 bankruptcy protection. The Administrators are appointed to determine either a rescue plan or to liquidate the assets and shut down the company.

  3. Big surprise by DrXym · · Score: 3, Interesting

    HMV barely changed its model from the last time it went bankrupt. It sells a few physical items like speakers, T-shirts, posters, figures etc. but its main business is still DVDs, CDs and console games and unsurprisingly these aren't selling as well as they once did.

  4. Re:Hilco by thegarbz · · Score: 3, Interesting

    That's a very biased and simplistic ways of looking at one of the possible outcomes. Or maybe it would happen along the lines of:

    1. Be voluntarily appointed as the administrator.
    2. Determine what if any of the business can be saved.
    3. Inject capital in the form of a high risk loan and a controlling stake of how that loan is spent.
    4. Turn the business around into a profit.
    5. Recover the loan with interest.

    Sometimes you even get number 6: Receive an award for the best turnaround of the decade. Though that isn't relevant in this case. Last time that happened was when this no name company called Hilco was appointed administrator of some music store called HMV 6 years ago and prevented the company from being liquidated. That is a completely different scenario.