Administrators in talks over ‘new arrangements’ with HMV book suppliers

Administrators in talks over ‘new arrangements’ with HMV book suppliers

Administrators are in “ongoing” talks with book suppliers to HMV and trying to “make new arrangements” after the music retailer collapsed for a second time

Book sales represent approximately 2% of HMV’s £254m revenues in the year to date, the administrator has confirmed, with Bonnier Books UK and Michael O’Mara titles among those on HMV’s list. 

Will Wright, Neil Gostelow and David Pike from KPMG’s Restructuring practice were appointed as joint administrators on Friday 28th December, six years after the retailer was rescued by restructuring firm Hilco in a £50m deal. 

With book sales accounting for just £5m in revenue, KPMG said talks are ongoing with suppliers. 

A spokesperson for the joint administrators told The Bookseller: “We are in ongoing dialogue with suppliers to see if they are willing to support trading, and trying to make new arrangements with them.”

Bonnier Books UK has a small selection of music and film titles stocked with HMV. A Bonnier spokeswoman said: “We’re sad to hear that HMV has gone into administration. It’s a brand that remains popular with music, film and game fans across the UK, and we hope that we can continue to trade with them in some capacity in the future.”

HMV’s range of books includes graphic novels, activity books, adult colouring books, annuals, music biographies and film-related titles. 

HMV’s 128 shops will remain open while talks with suppliers and potential buyers continue. 

Executive chair of HMV and Hilco Paul McGowan said: “During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, while HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.

“HMV has clearly not been insulated from the general malaise of the UK high street and has suffered the same challenges with business rates and other government-centric policies which have led to increased fixed costs in the business.

“Business rates alone represent an annual cost to HMV in excess of £15m. Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”

The joint administrators will continue to trade the business as a going concern while they assess options for the business, including exploring the possibility of a sale as a going concern.