HMV is on the verge of going into administration for the second time in a period of six years. According to reports, it will be placing 2,200 jobs at risk.
This morning, Sky News reported that the firm filed a notice of intention to appoint administrators last week as it held last-minute discussions with its suppliers.
In 2013, the firm was bailed out in a deal worth £50 million when Hilco, a restructuring specialist, acquired it. At the time, it was a publicly traded firm.
Some sources informed Sky News that the chain had been in discussions with some leading record industry names as they look for financial support. HMV has 130 shops across the United Kingdom.
Reportedly, some record labels have wished to avoid seeing the largest physical music retailer of the country to go under.
However, some sources said that as the emergence of streaming services such as Apple Music and Spotify have eaten away at physical music sales, the business model of HMV has become unsustainable.
The chief executive of Retail Economics, Richard Lim, stated: “Poor Christmas trading has claimed its first victim as the industry continues to adapt to seismic structural shifts in consumer behaviour, fiercer competitor dynamics and spiralling operating costs.”
He added: “Set against the backdrop of turbulent political and economic undercurrents, this perfect storm of pressures has intensified into a year of distress for the industry.”
He continued: “While it is too early to assess the relative success of Christmas trading, it’s clear that consumer confidence is fragile and shoppers’ propensity to spend is weak.”
The likely demise of HMV comes as the high street experiences more hardship over the festive period, with the footfall on Boxing Day down this year yet again and warnings from retail figures that the end of the year could be considered as the worst ever for the industry.
The news also comes despite HMV planning a comeback in the face of the increased dominance of Amazon to become the largest physical music retailer in the United Kingdom, in the third quarter of the year.
According to data that was published by Kantar Worldpanel, HMV recorded growth in market share for the second consecutive quarter to a total of 28 percent in the 12 weeks to the 23rd of September.