HMV Poised To Call In Administrators

[Mavrick]

A dark, dark day is upon us.

UPDATE:

19:15 15/1/13

HMV.com officially taken offline.



UPDATE:

22:13 14/1/13

HMV confirms intention to enter administration

Retailer HMV has filed notice to appoint administrators.

HMV's shares have been suspended from trading on the London Stock Exchange with immediate effect.

It is understood that administrators Deloitte will keep all stores open while it searches for a potential buyer.

Here's HMV's full statement:

On 13 December 2012, the Company announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.

Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, 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.

The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.

It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.

The Company's ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect.

UPDATE:

21:50 14/1/13

Suppliers' refusal to answer HMV's £300m call for help led to administration

Tonight's anticipated collapse of HMV came about after suppliers ignored the retailer's latest plea for help.

That's according to The Financial Times, which reports that HMV directors last week asked suppliers for yet another financial lifeline to keep the chain aloft – this time to the tune of £300m.

That was one bailout too many, however, and their refusal has led to HMV's decision tonight to appoint Deloitte as administrator. An official announcement could arrive as soon as tonight.

The chain employs around 4,000 workers and operates 230 UK stores. Most stores will continue trading tomorrow while Deloitte attempts to find a buyer. If this proves unsuccessful, however, store closures could commence imminently.

http://news.sky.com/story/1038002/hm...administrators

HMV directors are in talks about the chain's future, with Deloitte lined up as a possible administrator, Sky News has learned.

Directors of HMV are this evening locked in talks 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.

I have learned that the board of HMV has been meeting today to thrash out options for the company, which are said to include a possible plan to call in administrators.

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 2,000 jobs.

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

If administrators are called in, the retailer’s board would probably hire either Deloitte or KPMG, two of the big four accounting firms, to oversee the process, according to people close to the situation.

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.

Its shares, already close to having negligible value, were further hit just before Christmas when the company warned that it risked breaching its banking covenants at the end of January, blaming poor sales in the run-up to Christmas.

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.

HMV insiders said the company has been considering updating the market next week on Christmas trading.

HMV has raised tens of millions of pounds by selling assets including the Hammersmith Apollo music venue and the Waterstone’s bookseller in an effort to buy itself more time to execute a turnaround strategy devised by Simon Fox, Mr Moore’s predecessor.

The music industry’s biggest companies have also chipped in to help prolong HMV’s future, participating in a new financing package last year.

The prospective administration of HMV is politically complicated by the fact that the company’s two biggest lenders are Lloyds Banking Group and Royal Bank of Scotland, which both count the British taxpayer as their largest shareholder.

HMV traces its heritage back to 1921 when Sir Edward Elgar, the renowned composer and conductor, opened its first store on London’s Oxford Street.

HMV declined to comment on Monday evening.

[Modman]

If HMV does manage to survive it will not be in the form we see today and in the end we will all be the poorer whether we buy online or on the high street. Amazon will have an even stronger hold with regard to online sales and supermarkets will not fill the void as they offer such a small range of products.

[mattyl149]

If the end is nigh, then I hope that the exclusive steelbooks get released first, or picked up by someone else, i.e. more likely Amazon

It would be a very sad day on the high street, and after Jessops, more unemployment. It can't be much fun working in HMV at the moment

[ricster]

Well as you said, there goes uk steelbooks. Amazon do carry some but whether they'll take up Hmv and plays quota of exclusives, I don't know.

I really hoped that best buy would make it in the uk, but that was crap. The Liverpool one had a good blu section but it was just a big carphone warehouse.

The only other giant is a sleeping giant and would need too big an overhaul. They recently went backwards IMO. Asda Walmart heavily reduced their blu sections when they merged the DVD and bluray charts. T be honest, I don't see Walmart in the states doing much steel wise now. Best buy seem to have that sewn up with target the next best.

That's entertainment seem to be flogging blockbusters ex rentals at the moment. Someone said bee.com stores were shutting, not sure that is correct, but it's going to be a case of online ordering only no competition = higher prices. Free amazon shipping probably scrapped.

Some people won't be bothered about no blus on the high street. "Ah well, I'll just download it!"

[Billz]

Well, this sucks.
Looks like Looper will be the last steelbook we ever get from them. I was so looking forward to walking into HMV on release day too! I'll have to risk getting it online now, if it isn't cancelled.

[tasker]

Lets just hope the administrator doesn't inflate the price the want for the chain before they put it in blue cross sale

What? somebody had to say it

[mattyl149]

It's the old adage of you don't miss something until it's gone, and in this case, this more than applies. The only other shops seem to sell ex-rental items, and as the rental stores are disappearing, there will be less of that. They also seem to sell titles that people have sold to Music Magpie

If HMV goes, what happens to Fopp? Would there be anyone who would be willing to buy that so that HMV would have some more money? It would probably only be a stay of execution, but it may give them time to turn it around

Imagine if someone like WHSmith went out of business, where else could you get a wide choice of magazines? Only the very large supermarkets, or somewhere like McColls (and these aren't everywhere)

I still think there will be more shocks over the next few weeks, where some other big retailers go into administration

If you were to ask someone ten years ago if they thought HMV could ever go out of business, I'm sure that there would have been very few people who would have said yes

[Mavrick]

I hope that they can pull a GAME, and survive on a reduced amount of high street stores and keep their online service going.

I said this when we found out about Play, but where the hell are we supposed to go for Blu-rays now? The high streets are dead, and Tesco/ASDA just don't cut it.

Selection is dire and prices are far too high 9 times out of 10. Hopefully they stay around for at least a few more weeks. I'll be sure to head in to my local on payday for what could be the last time

[Davy]

FOPP survives on HMV overstock, they've already went under once, they can't rescue HMV

Worried about the Skyfall steel now.

[CinemaScope]

This is really sad news, the end of an era. I used to visit the big HMV shop in Oxford street in the 60's & bought a lot of records there (it used to have a sign outside saying it was the largest record shop in the world). Just think, about 15 years ago in London's West End there was three huge record stores: HMV, Virgin & Tower. But I know I'm part of the problem, as like almost everyone else I buy online these days.

[ricster]

Originally Posted by mattyl149

It's the old adage of you don't miss something until it's gone, and in this case, this more than applies. The only other shops seem to sell ex-rental items, and as the rental stores are disappearing, there will be less of that. They also seem to sell titles that people have sold to Music Magpie

If HMV goes, what happens to Fopp? Would there be anyone who would be willing to buy that so that HMV would have some more money? It would probably only be a stay of execution, but it may give them time to turn it around

Imagine if someone like WHSmith went out of business, where else could you get a wide choice of magazines? Only the very large supermarkets, or somewhere like McColls (and these aren't everywhere)

I still think there will be more shocks over the next few weeks, where some other big retailers go into administration

If you were to ask someone ten years ago if they thought HMV could ever go out of business, and I'm sure that there would have been very few people who would have said yes

Whsmith are not what they used to be also. They used to sell DVDs and blurays. My whsmith used to sell blus on the Saturday before release date. Now they're more interested in selling sweets and chocolates. You try buying a newspaper in there. Do you want a box of chocolates with that. It's worse than McDonald's do you want fries with that.

[ricster]

Originally Posted by Mavrick

I hope that they can pull a GAME, and survive on a reduced amount of high street stores and keep their online service going.

I said this when we found out about Play, but where the hell are we supposed to go for Blu-rays now? The high streets are dead, and Tesco/ASDA just don't cut it.

Selection is dire and prices are far too high 9 times out of 10. Hopefully they stay around for at least a few more weeks. I'll be sure to head in to my local on payday for what could be the last time

I found Hmv cheaper release week than Asda and Tesco on chart titles recently.

[Mavrick]

Originally Posted by mattyl149

It's the old adage of you don't miss something until it's gone, and in this case, this more than applies. The only other shops seem to sell ex-rental items, and as the rental stores are disappearing, there will be less of that. They also seem to sell titles that people have sold to Music Magpie

If HMV goes, what happens to Fopp? Would there be anyone who would be willing to buy that so that HMV would have some more money? It would probably only be a stay of execution, but it may give them time to turn it around

Imagine if someone like WHSmith went out of business, where else could you get a wide choice of magazines? Only the very large supermarkets, or somewhere like McColls (and these aren't everywhere)

I still think there will be more shocks over the next few weeks, where some other big retailers go into administration

If you were to ask someone ten years ago if they thought HMV could ever go out of business, I'm sure that there would have been very few people who would have said yes

Yep, were coming up to the end of the finacial year so there's most likely more bad news to come before the end of April.

[Billz]

I think people are flooding the website right now because of this news, as I seem to be lagging on it at the checkout page.

Blu-ray.com is running at a great speed, so I think the problem is on HMV.coms' end.

[tigertron]

I do hope the website survives as I have some outstanding orders with them.

I do feel sorry for the staff though, and I hope they can find new jobs soon.

[ricster]

http://www.bbc.co.uk/news/business-21021073

[crazybeats]

As a person that only buys my music on vinyl hence I have many places to buy vinyl from including HMV, got Alicia Keys new album in there today actually. I can survive without them.

But shame on all of you that would rather support tax avoiders like Amazon rather than honest tax paying bricks and mortar businesses like HMV. I hope they hike up the prices for those silly cardboard slipcases and steelbooks that certain penny pinchers online. Well actually, you're not gonna have much of a choice but to buy online if HMV go under unless Tesco start selling 40 year old movies on blu ray which I just can't see happening. Shame on you all.

[Modman]

There is some hope, HMV do have 20% of the entertainment market in the UK, they are not selling something people don't want. The likes of Universal etc want to still have their product sold on the high street, they don't want to be reliant on Amazon and the large supermarkets who will start to call the shots knowing that the studios etc have nowhere else to go!

[mattyl149]

Originally Posted by ricster

Whsmith are not what they used to be also. They used to sell DVDs and blurays. My whsmith used to sell blus on the Saturday before release date. Now they're more interested in selling sweets and chocolates. You try buying a newspaper in there. Do you want a box of chocolates with that. It's worse than McDonald's do you want fries with that.

The amount of extra receipts I get when I buy my weekly copy of Amateur Photographer, and all are for 10% off, then this can't be good. How much profit can they be making by offering all these discounts?

Jessops went under and their high street competition Jacobs had already gone under, so if Comet can go out of business, then how can Currys/PC World survive

I have a nasty vision of the future where no-one has Blu-rays, DVDs, CDs, books, newspapers, pictures on the wall, cameras, money, TVs or computers. We will all have empty homes and just one device on which we will play games, watch films and TV, listen to music, pay for everything and take photos. We probably won't have to leave the house for work, as we'll all be working from home, as there won't be many retail jobs for people to go to

For instance, buying clothes online. I'd rather go to a shop, have a look around, try something on and see if it fits and if I like it. I don't want to have to order multiple sizes and colours, wait a few days, pick what I want, send the rest back, and then wait a week for a refund

[mattyl149]

Originally Posted by tigertron

I do hope the website survives as I have some outstanding orders with them.

I do feel sorry for the staff though, and I hope they can find new jobs soon.

The problem is with Jessops also going, there will be over 6,000 extra people looking for jobs. As there are already over a million people unemplyed, and the retail sector not looking too good, then I think the future will be very bleak for some of them