HMV In Crisis Talks

HMV directors are in talks about the chain's future with Deloitte lined up as a possible administrators about the retailer’s future amid growing concern that it could become the latest big-name high street chain to succumb to the flat-lining British economy.

People close to the situation said that a number of options remained under consideration and that any announcement about a board decision was unlikely until later on Monday or Tuesday. It remains conceivable that HMV's lenders or another party will ride to its rescue and avert the need to appoint administrators.

If HMV did concede defeat in its attempt to trade itself back to health by calling in administrators, it would deal a devastating symbolic blow to the future of the British high street.

It would also put more than 4,000 jobs at risk, just days after the camera retailer Jessops announced its demise, with the closure of nearly 200 shops and the loss of almost 2000 jobs.

HMV is run by Trevor Moore, who recently took over having held the chief executive’s post at Jessops.

Some of HMV’s 230 UK stores could yet be saved from closure if the company manages to attract a bidder. However, analysts have said for some time that a viable HMV is likely to involve a significantly smaller number of shops trading on UK high streets.

Apollo Management, the US-based investment firm, has been acquiring some of HMV’s debt from its lenders and was reported last month to be keen on a takeover of the company. Reports today suggested that it was no longer interested in buying HMV.

HMV has been the subject of periodic speculation that it would fall into administration for several years as it faced increasingly intense competition from supermarkets as well as online retailers such as Amazon.
The company has not yet disclosed its trading performance during the crucial festive period although a decision last week to launch a huge sale across its product range reignited fears – denied by HMV – that it was running short of cash.

Music and film retailer HMV is preparing to call in the
administrators as it becomes the highest profile chain to collapse
during the current economic malaise.
Around 4,500 jobs are at
risk at the 90-year-old retailer after its board called in Deloitte as
administrators following poor results over the crucial Christmas trading
period – when it traditionally makes most of its sales.
Best
known for its Nipper the dog trademark, HMV has failed to find a way
through difficult economic conditions and fierce competition from
supermarkets.
It has been struggling with debts for just over two
years, and while banks have revised the terms of their loans it was
thought to been handed a lifeline after its suppliers, including
Universal Music, EMI, Warner Brothers and Disney, were handed shares in
exchange for improved commercial terms.
But those firms were said
last night to have refused to agree to provide additional financing to
the retailer, leaving it with few options to find the extra resources
needed to keep trading. HMV's website was still advertising its 25% off
sale for thousands of products on Monday.
The chain, which opened
its first store in 1921 on London's Oxford Street and still owns the
world's biggest record shop there, had been attempting to shift out of
films and music and into accessories such as headphones. But it had not
been enough to counter the decline in conventional sales. Simon Fox,
then chief executive, jumped ship to Trinity Mirror last year to be
replaced by Trevor Moore, the former boss of Jessops, the camera
retailer which itself collapsed last week.
Jessops closed its 187
shops for the last time on Friday and made 1,370 staff redundant. It is
one of several high street names to go to the wall over the past year,
including the electrical retailer Comet, clothing chain Peacocks and JJB
sports.
HMV is arguably the highest profile name to collapse
during the prolonged economic downturn and altering shopping habits that
also forced Woolworths out of business five years ago, at the start of
the banking crisis.
Ironically the collapse of Woolworths had
initially helped HMV, which enjoyed a peak in sales shortly afterwards,
before the competition escalated from supermarkets and online retailers.
A
weak economy in the run-up to Christmas has exacerbated the woes of
retailers struggling with business models overwhelmed by technological
changes such as the explosion in camera phones, which destabilised
Jessops, and the explosion in internet downloading which undermined
demand for CDs and DVDs at HMV. With consumers less keen to spend over
the key festive period, which is a make-or-break time for struggling
retailers, Jessops and HMV have been unable to prove to their financiers
that they have a viable business model.
Last month in the midst
of the Christmas trading period HMV had warned that the tough trading
conditions meant it was already struggling despite having installed a
new management team in Moore and new finance director Ian Kenyon.
It
remains to seen what the impact will be on the film companies and
record labels which rely on its 247 stores for their sales.

HMV have gone down..deloitte are the administrators i believe x

More bus drivers for you.

might be a good time to pop in to buy an ipad .but not with the vouchers they sold to thousands and these are worthless at the moment

now thats a good idea kat..i wonder what would happen if everybody who has still got vouchers were to go down to the shop choose what they wanted to buy and then handed over their vouchers to pay for it ,then tell the assistants you have the money for these already then walk out of the shop with their goods..could they be done for shoplifting..imo HMV should have stopped selling vouchers months ago..they must have known something wasnt right with the business...people are saying this is down to online shopping..what they seem to forget is that HMV was selling online from guernsey until the greedy tory government stopped lvcr x

Blockbusters UK is now in trouble. Have promised to honour vouchers. police were called to an hmv store when the refused to houner gift vouchers. This practice amounts to theft . When my son was in our local HMV yesterday they were still giving customers the chance to preorder games.

HMV is accepting gift vouchers again - but no one knows how long for.

A spokesman at the Guernsey branch says staff are allowed to accept the
tokens for "the time being" - but they don't know how long it will be
for.

The man said they may have to stop accepting them again before the end
of today, so if you have any go and spend them now.

It's believed thousands of pounds worth of gift vouchers were sold over
Christmas and as late as Monday evening, before administrators were
called in.