KPMG has been appointed as the administrator of HMV, a retail music shop, after it announced that it would be entering administration for the second time since 2013.
At least 2,200 jobs will be placed risk once the 97-year-old entertainment store collapses. HMV has 128 shops across the United Kingdom.
The administrators are set to continue to operate all of its stores while they explore other business options including negotiations that will be held with major suppliers and as it looked for buyers for a possible sale.
In 2013, the firm was bailed out in a deal that is worth £50 million when Hilco, a restructuring specialist, acquired it.
Hilco blamed a “tsunami” of retail challenges, such as the business rate levels and the move to digital.
A partner at KPMG and joint administrator, Will Wright, stated: “For decades, HMV has been one of the most iconic names on the high street.”
He added: “Whilst we understand that it 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.”
He continued: “This has been in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures.
He disclosed: “Over the coming weeks, we will endeavour 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 honoured as usual, while the business continues to trade.”
The executive chairman of HMV and its owner Hilco Capital, Paul McGowan, stated: “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 that HMV sold 31 percent of all physical music in the United Kingdom this year and 23 percent of all DVDs and Blu-rays. He also noted that its market share grew month by month throughout the year.