HMV Latest Retailer To Go Into Administration
HMV is the latest of the UK high street retailers to go into administration: and this is the second time in the past six years. The music retailer has appointed KPMG to try to keep the business running as long as possible, while a buyer is sought. If no successful business sale is enacted, it’s likely HMV will be another popular retailer that disappears from the high streets.
About HMV administration
The HMV business is currently owned by Hilco, who acquired the retailer when it originally appointed administrators in 2013. The company employs around 2,200 workers and it’s hoped they will all continue in post while a new owner is being sought. Hilco place the blame for the business failure on the high business rates levied across UK high streets and the fact that many consumers now stream music online, rather than purchasing physical copies of their favourite records.
Paul McGowan is the executive chairman of HMV and 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 added that HMV had a major share of the music retail market in the UK and had sold 31% of all physical music copies purchased in 2018, as well as 23% of all the Blu-rays and DVDs sold.
Although the retailer’s market share saw month-on-month growth through 2018, it failed to keep pace with the digital music industry or turn around the profits needed to remain trading. The revenues from digital music sales overtook those of high street retailers back in 2012 and the emergence of platforms like Spotify, Netflix and Amazon have compounded the growth of digital music retailing.
Other UK Retailers Feeling Strain
HMV is the last remaining national music retailer in the UK. Modern consumers have already seen a number of high profile retailers disappear from high streets, including BHS, Woolworths, Maplins, Comet, Virgin Megastore, Blockbuster Video, Toys R Us, Zavvi, MFI, Thresher and JJB Sports. Others, like Carpetright, New Look and Mothercare, have been forced to conduct restructuring deals with landlords. One thing’s for sure: the UK high street retailing sector is going through a rocky patch at this moment in time.
Investing in any kind of retail shares at this moment may be a risky venture, however, some retailers worth keeping an eye on include The Works, Card Factory and perhaps some of the main supermarket chains.