If HMV had a very poor Christmas trading period then it is almost inevitable that the company will go into administration or try a company voluntary arrangement. It has been reported that KPMG have filed a notice of intention of appoint administrators. The firm currently employs 2,200 people and this will be the second time in 6 years that the business has gone into administration. They will become the first post-christmas victim of the high street!
Online sales of downloaded music and videos have soared in recent months. It was only last month, that the company announced they had seen a 10% decline in sales.
HMV's management have been making lots of changes to try and turn around the company with new store designs and product ranges. They have survived for longer than was expected in early 2018, despite massive debt of £176m. They have sold off their live music business and extracted better terms from their suppliers in exchange for some equity.
Hilco, which this year bought Homebase, purchased the group's debt and acquired the business in a £50m deal.
Music industry sources said the rise of streaming services had "decimated" HMV's business and made its future operation unsustainable.
Brexit has been said to have much blame, yet it should not be suggested as the only cause. There are many more forces at play.
Management are rumoured to be in talks with leading music industry firms to seek financial support. However, such talks are said to be looking unsuccesful.
Hilco and KPMG both fail to comment