HMV has announced it is set to go into administration, as early as today, placing around 4,000 jobs at risk
HMV has become the latest high street retail chain to announce that it's set to go into administration. The music, DVD and videogames retailer says its appointed Deloitte as an administrator for its 239-shop chain, placing around 4,000 jobs at risk.
HMV has been on borrowed time for quite a while now; in December its share price fell 40 per cent when the retailer's debt reached £180 million. Since then, HMV's suppliers - among them Universal Music, EMI, Warner Brothers and Disney - have refused to provide the financial support the retail chain needed to keep afloat.
According to a statement released by HMV, its shares have now been suspended from trading on the London Stock Exchange with immediate affect.
"On 13 December 2012, the Company announced that as a result of current market trading conditions," the statement said. "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."
At the time of this writing, HMV continues to trade but is refusing to accept any store credit or gift vouchers. If no buyer is found, HMV will join Comet and Jessops as the latest high street retail casualty.