Music retailer HMV today (28th December) appointed KPMG as administrators, citing the challenges to the high street and an "unsustainable" fall in the market for DVDs this Christmas.
The retailer stocks a small range of books alongside music, film and game products. The chain's 125 shops will remain open while talks with suppliers and potential buyers continue, it has been confirmed.
HMV previously fell into administration six years ago, when it was rescued by restructuring firm Hilco in a £50m deal.
Paul McGowan, the executive chair of HMV and Hilco, 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.”
Will Wright, partner at KPMG and joint administrator, said: “For decades, HMV has been one of the most iconic names on the high street. Whilst we understand that it has continued to outperform the overall market decline in physical music and visual sales, as well as growing a profitable ecommerce business, the company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industry. This has been in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures.
“Over the coming weeks, we will endeavour to continue to operate all stores as a going concern while we assess options for the business, including a possible sale. Customers with gift cards are advised that the cards will be honoured as usual, while the business continues to trade.”
HMV's range of books includes graphic novels, activity books, adult colouring books, annuals, music biographies and film-related titles.