HMV on the brink of collapse putting 2,200 jobs at risk

Britain's biggest CD, DVD and games chain is set to fall into administration after the company filed a notice of intention last week, putting more than 2,200 jobs at risk.

HMV, which has 128 shops across the country and a website, was looking to appoint administrators last week, Sky News reports.

Sales were down by £23.6million in 2017 compared to the previous year, its latest report published in October revealed.

The music chain is the first victim of the struggling high street after Christmas.

The retailer has been in last-ditch talks with high-profile figures in the music industry to try and avoid collapse, according to Sky News.

The music chain first fell into administration in 2013.

Which shops have we lost from the high street in 2018?

• Asda: The supermarket is to start consulting with staff over potential job losses next year which could total almost 2,500.
• Coast collapsed into administration in October 2018, putting 300 jobs at risk. Twenty-four standalone stores have been closed, while Karen Millen is understood to have bought the group's brand and website, saving around 600 roles.
• Debenhams: The department store is accelerating its store closure programme, putting up to 50 sites and 4,000 jobs at risk.
• Evans Cycles: Up to 50 per cent of its locations will also close, leading to around 650 job cuts.
• Gaucho restaurant group prepared to file for administration in July 2018 facing the loss of 1,500 jobs. The Argentinian restaurant had been in talks with potential buyers since May 2018.
• House of Fraser announced in early August that 31 of its 59 stores would be closing by January 2019. This meant 2,000 jobs were at risk – along with over 4,000 of its brands and concessions. It's now been confirmed that Sports Direct owner Mike Ashley has bought the company.
• Ikea: The Swedish furniture store unveiled plans to cut 350 UK jobs over the next two years as part of a global transformation plan. But it will also add 500 new jobs in spring when the new Greenwich store opens.
• Laura Ashley: The retail chain is expected to close around 40 stores under its new chairman.
• New Look is looking at plans to close 60 stores in the UK, with its owners considering a possible Company Voluntary Arrangement (CVA) which will allow it to restructure its business and pay-off its debts.
• Pets At Home: The pet chain is likely to cut some jobs next year, having earmarked 30 vet practices at its stores for closure.
• Prezzo  also announced plans to close 100 restaurants putting hundreds of jobs at risk.
• Toys R Us went into administration earlier this year. The company, for many years a household name in retailing, faced the loss of 3,000 jobs.

It was bought by Hilco, which also owns Homebase, and the company acquired HMV's £50million debt.

After it bought the company, it relaunched its website five years ago to focus on growing online sales.

In October, HMV overtook Amazon as the biggest seller of physical music and bosses said its website was also competing with the online giant for vinyl sales and mail orders, according to Music Week.

But the group also reported a 22 per cent slump in physical album sales this year, and its profits slipped by £7million.

Sources say soaring business rates and high street leases have led to the company's dip in revenue and profits.

Why is the high street struggling?

Recent analysis by the Labour party showed there are 100,000 fewer Brits working in the retail industry than there were in 2015.

Last year alone, the high street lost a total of 1,800 shops.

Companies blame the rise of Amazon and other online shopping sites for driving footfall away from town centres.

Labour also points to price-gouging by town centre car parking firms, and to look into shops being left empty by landlords.

Meanwhile the Liberal Democrats want to abolish business rates and replace them with a tax on the value of land.

Influential Tories are calling on Chancellor Philip Hammond to fast-track a 3 per cent tax on the likes of Amazon, eBay and Google to “level the playing field” with UK business and help the high street.

The near-collapse of HMV will be a blow to the music industry, which relies on the chain for sales of physical CDs, records, DVDs, and games.

It is the biggest entertainment retailer still on the high street, as companies lose sales to online giants such as Amazon and eBay.

Hilco is now looking to bring in audit, tax and advisory firm KPMG to handle HMV's administration, according to the Daily Telegraph.

KPMG and Hilco declined to comment.

The first HMV shop opened in 1921, taking its name and logo from the famous painting His Master’s Voice, by Francis Barraud, showing a dog named Nipper sat, ear cocked, listening to a phonograph.

You can find your nearest branch using its store finder tool.

The news comes after almost 20,000 shops and restaurants closed their doors and 148,132 jobs were wiped out in the past year, end of year figures compiled by the Centre for Retail Research show.

There were also dire warnings over poor November trading, raising fears a sub-par Christmas could push more chains into distress.

It's not just the high street that's struggling as online stores, including Asos, TK Maxx and Boohoo.com, slashed prices in order to drum up business.

Meanwhile, Boxing Day sales are well underway, and we've rounded up the best bargains for you to snap up.

Aldi has also launched a winter sale with up to 50 per cent off.

We pay for your stories! Do you have a story for The Sun Online Money team? Email us at [email protected] or call 0207 78 24516. Don't forget to join the Sun Money's Facebook group for the latest bargains and money-saving advice.

Source: Read Full Article