When It Happens Panel Get involved: send your photos, videos, news & views by texting 'OXFORD NEWS' to 80360 or email
HMV chain calls in administrators
Ailing music chain HMV has lost its battle for survival in a devastating blow for the British high street and more than 4,000 staff.
The appointment of Deloitte as administrator to the 92-year-old business comes after the failures of Jessops and Comet caused the closure of 422 stores and loss of more than 8,000 jobs.
HMV's 238 outlets will remain open while Deloitte attempts to find a buyer for some or all of the business, although it is likely that there will be widespread store closures as a result of the collapse.
The company's administration also means that vouchers and gift cards, many of which were given as Christmas presents, will be worthless.
Squeezed by internet retailers and supermarkets, whose scale has enabled them to offer CDs and DVDs at cheaper prices, HMV's boss Trevor Moore warned before Christmas that the entertainment group was in trouble. Mr Moore said the group would fail to meet expectations for the year to April and that it would breach the terms of its loan agreements later this month.
Suppliers including Universal Music came to HMV's rescue in January 2011 with a deal which helped the retailer shed some of its huge debt pile. But according to the Financial Times, they balked at a request last week from HMV for about £300 million in additional financing to pay off its bank debt and fund an overhaul of the company's business model.
HMV sought to diversify into live venues and consumer electronics and was forced to sell off several parts of its business, including the Waterstones book retailer, to reduce its debt pile, while closing loss-making stores.
But Neil Saunders, managing director of retail consultancy Conlumino, said the collapse of HMV was inevitable. He added: "While many failures of recent times have been, at least in part, driven by the economy, HMV's demise is a structural failure. In the digital era where 73.4% of music and film are downloaded or bought online, HMV's business model has simply become increasingly irrelevant and unsustainable."
Back in May last year, when former boss Simon Fox was still in charge, the group said it was looking for pre-tax profits of at least £10 million for the 2012/13 financial year. His replacement joined the group from camera chain Jessops, which went into administration last week at the cost of 1,370 jobs across its 187 stores.
The state-backed banks Royal Bank of Scotland and Lloyds Banking Group were lenders to the group. RBS said in a statement: "The banking group led by RBS and Lloyds Banking Group have provided significant support to HMV over the past two years, as it has sought to reshape and restructure its business in the face of extremely difficult trading conditions. Unfortunately, despite the best efforts of management, lenders and suppliers, it has not proven possible to avoid a formal insolvency process."