HMV Group plc (LON:HMV), the UK-based music and DVD retailer, has called in the administrators after a final attempt to secure funding failed. The retailer is closing its doors after 91 years in service.
The retail firm’s managers have begun working with administrators Deloitte – who will keep HMV’s 239 stores throughout the UK and the Republic of Ireland open, while it assesses the business and seeks prospective buyers.
In a statement on Monday, HMV Group plc (LON:HMV) said the trading of the company’s shares on the London Stock Exchange had been suspended.
“The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the company,” HMV said.
HMV’s current CEO is Trevor Moore. Moore joined HMV Group plc (LON:HMV) last year from camera specialist Jessops, which also went into administration last week. When speaking to journalists today, Moore said:
“We remain convinced we can find a successful business outcome,
“The intention is to continue to trade the stores.”
Moore also added: “I would like to personally pay tribute to the 4,500 people who work for HMV. Clearly this is a very worrying time for them and their families.”
The business has been struggling for some time, largely due to the surge of digital media, which has brutally dented the sales of physical copies of CD’s and DVD’s, pushing HMV Group plc (LON:HMV) into deeper and deeper levels of debt.
At the retailers half year to October 27, debt levels stood at £176m ($283m). The company had already shed its book chain, Waterstones, back in 2011.
HMV Group plc (LON:HMV) was hoping to make a recovery with strong sales over the Christmas shopping period, but investors began worrying last week as the retailer announced a month-long 25 percent off sale just last week – implying the company needed to shift stock after a poor trading period over Christmas.
HMV’s shares closed at just above a penny on Monday, valuing the company at around £5m, or just over $8m.