Deloitte appointed HMV administrators

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Neville Kahn, Nick Edwards and Rob Harding of Deloitte have been appointed joint administrators of HMV

Edwards and Kahn worked on Comet late last year when the electrical store lost all outlets and staff. Kahn was also appointed administrator at Woolworths, which lost over 25, 000 staff and suffered the closure of all stores in 2009.

HMV became the latest casualty in the battle with online shopping yesterday when suppliers refused a request for £300m of additional funding to pay off its massive debts, bringing uncertainty to a workforce of over 4,000 and 250 stores.

Nick Edwards said, “HMV is an iconic retailer and continues to be a very popular brand, but as we have seen with many high street retailers, the market is changing rapidly and conditions are currently very tough.

“Following our appointment, we are working closely with management and staff to stabilise the business in order to continue trading whilst actively seeking a purchaser for the business and assets. We appreciate the cooperation and support from the staff, customers, suppliers and landlords at what is clearly a difficult time.”

Deloitte will keep HMV's stores in the UK and the Republic of Ireland open while it seeks potential buyers.

In a statement yesterday, HMV said, "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect."

It added that the board "understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business".

The news comes as another major blow to the high street, following the loss of 1,400 jobs last week after camera store Jessops folded and Comet closing late last year.

The embattled music and DVD chain suffered a 10.2% slump in sales and its net debt rose to £176.1m over the six months to the end of October.

HMV, whose first store was opened in London's Oxford Street in 1921, sparked fears last week when it announced a month-long sale with 25% off prices.

Jon Copestake, retail analyst at The Economist Intelligence Unit, said the “endless speculation over the last year or more highlights the degree to which they were living on borrowed time”.

“The decline of CDs and DVDs can be largely attributable to HMV's collapse but many will point to the decade-old failure of the firm to head off price competition from supermarkets and Amazon as well as downloads from Napster and iTunes,” he added.

Raymond Doherty

 

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