Music retailer HMV on the verge of second administration since 2013, reports

HMV is set to go into administration for the second time in six years, putting 2,200 jobs at risk, according to reports.

The company reportedly filed a notice of intention to appoint administrators last week as it held last minute talks with suppliers, Sky News reported this morning.

The company was bailed out in a deal worth £50m in 2013 when restructuring specialist Hilco bought it.

Sources told Sky News the chain, which has 130 shops in the UK had been in talks with leading record industry names looking for financial support.

Record labels have reportedly wished to avoid seeing the country’s largest physical music retailer go under.

But as the rise of streaming services such as Spotify and Apple Music have eaten away at physical music sales, HMV’s business model has become unsustainable, the sources said.

The company was bailed out in a deal worth £50m in 2013 when restructuring specialist Hilco bought it. It was a publicly traded company at the time.

Richard Lim, chief executive of Retail Economics said: “Poor Christmas trading has claimed its first victim as the industry continues to adapt to seismic structural shifts in consumer behaviour, fiercer competitor dynamics and spiralling operating costs.

"Set against the backdrop of turbulent political and economic undercurrents, this perfect storm of pressures has intensified into a year of distress for the industry.

"While it is too early to assess the relative success of Christmas trading, it's clear that consumer confidence is fragile and shoppers' propensity to spend is weak."

HMV’s likely demise comes as the high street endures more hardship over the festive period, with Boxing Day footfall down this year again and warnings from retail figures the end of 2018 could be the worst ever for the industry.

The news also comes despite HMV staging a comeback in the face of Amazon’s increased dominance to become the largest physical music retailer in the UK in the third quarter of 2018.

In the 12 weeks to 23 September, HMV experienced market share growth for the second consecutive quarter to a total of 28 per cent, according to data published by Kantar Worldpanel.