Tue, Jan 22, 2013, 00:00

Why did HMV Ireland shut up shop?

Amidst all the speculation about what is going to happen to HMV, one question remains unanswered: why did the 16 Irish stores, which employ 300 people, close, while the British operation stayed open?

The stores closed last week after Deloitte was appointed as receiver. Staff staged a series of sit-ins which only ended when they were told that they would be paid for this month – their wages are due this week.

An impossible-to-estimate number of consumers with HMV gift vouchers were left feeling very sore indeed.

While all this was going on, its British parent, HMV Group, continued to trade. Both the media and its chief executive, Trevor Moore, have been talking up its chances of being sold as a going concern, while there was much hope expressed that a “much-loved” brand would survive.

The Irish staff and consumers could be forgiven if they have fallen out of love with the brand. There seems to be little in the way of an explanation for why the subsidiary is being treated differently.

The most obvious and simplest explanation is that the 16 Irish stores were losing money and required the parent’s support to stay open. The parent is already insolvent – it cannot pay £30 million due to its lenders this month – and so cannot afford to provide cash to the Irish subsidiary.

As the British parent is in administration, it has court protection from its creditors in the UK. That protection cannot be extended to its Irish subsidiary as the UK courts have no jurisdiction here and there is no real equivalent to administration in the Republic’s company law system.

The most obvious way for the Irish operation to get protection from its creditors is to go into examinership. But for that to happen, HMV Ireland Ltd has to convince a High Court judge that it has a reasonable prospect of survival. If it has been relying on its parent for support, that could be difficult.

As a result of guarantees and security given to the group’s banks last year, HMV Ireland is potentially on the hook for its parent’s debt, ensuring that it has been sucked into the whole insolvency process. It the circumstances, appointing a receiver and shutting up shop, at least for now, would presumably have looked like the quickest way of dealing with the problem.

But what if the Irish stores were profitable...?

Davos to discuss euro zone 'way forward'

It’s January, it’s snowing: it must be time for Davos.

This week the great, the good and the seriously wealthy will again descend upon the Swiss mountain-top resort for the strictly invitation-only World Economic Forum, which kicks off today at 5pm Irish time.

Digicel chairman Denis O’Brien will mingle with fellow captains of industry including Lakshmi Mittal, chief executive of steel giant ArcelorMittal; Brian Cornell, chief executive of Pepsi; and Carl-Henric Svanberg, chairman of BP.

Minister for Finance Michael Noonan will attend with Taoiseach Enda Kenny, who will speak on a panel alongside three other European leaders – outgoing Italian prime minister and former European commissioner Mario Monti; prime minister of the Netherlands Mark Rutte; and the Polish leader, Donald Tusk.

The topic? “The Euro Zone Crisis: The Way Forward.”

Of course whether or not the “way forward” includes a deal on Ireland’s bank debt remains to be seen and is likely to form part of the discussion.

This year, however, Mr Kenny might be hoping for a more low-profile appearance at the event compared with last year, when his comments that the Irish financial crisis was caused because “people went mad borrowing” sparked a storm of controversy at home.

When in Davos, the Irish leaders might also want to “press the flesh” with noted FDI investors such as Facebook chief operating officer Sheryl Sandberg and Drew Houston, chief executive of Dropbox.

Other Irish representatives expected to attend include former president Mary Robinson, who will be there in her capacity as chairwoman of her Foundation for Climate Justice, and Davos veteran Archbishop Diarmuid Martin. There will be other familiar faces in the 2,500 or so attendees.

But’s it not going to be all business and politics. Bringing a bit of glamour to the event will be Hollywood actress Charlize Theron, who will speak on her Africa Outreach Project.

Vote to pick most toxic financial product

Annoyed with credit default swaps? Angered by contracts for difference?

One German Green MEP wants to leapfrog light-touch regulation and eliminate Europe’s most dangerous financial product.

Sven Giegold (below) has started a competition to find the most toxic product traded on the markets.

Once identified, the offending product will be brought to the attention of the supervisory authorities.

“We then expect them to scrutinise the product and limit its application or ban it totally from the markets if necessary,” says a website set up for the competition.

The European Union is likely to give the European supervisory authorities the power to ban dangerous products, through a review of its Markets in Financial Instruments Directive.

Giegold is anxious to keep up the pressure on to ensure that happens: “The goal should be to ensure robust regulation of the sector to prevent dangerous finance products from causing the damage they have done in the past,” he said.

So far, proposals posted on the website range from collateralised debt obligations (a type of asset backed security with multiple strands of varying risk) to contracts for difference (which involves betting on price movements without owning the shares outright) – a product at the centre of the downfall of Anglo Irish Bank and businessman Seán Quinn.

The deadline for the submission of proposals is February 15th.

After that a panel of experts will analyse and rate the proposals, reducing them down to three.

A public vote will determine which product is the nastiest. The “winner” will be announced on March 4th.

Anyone wishing to make a pitch should visit

Quote of the day

"Until now the international monetary system got through the crisis without competitive devaluations and I hope very much it stays that way.” Bundesbank head Jens Weidmann worries about the politicisation of the central banking system

Number of the day

€413m: Amount invested last week in European “junk” bond funds, the second largest since records began in 2005 and just short of the all-time record of €443 million in September.


The Irish Technology Leadership Group’s Global Technology Leaders’ Summit takes place in Cork, concluding with a keynote address from former Intel chief executive and chairman Craig Barrett at a gala dinner.

Sign In

Forgot Password?

Sign Up

The name that will appear beside your comments.

Have an account? Sign In

Forgot Password?

Please enter your email address so we can send you a link to reset your password.

Sign In or Sign Up

Thank you

You should receive instructions for resetting your password. When you have reset your password, you can Sign In.

Hello, .

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

Thank you for registering. Please check your email to verify your account.

We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.