Up to 300 Irish jobs at risk as HMV to enter administration
Music and games retailer HMV is poised to go into administration as early as today, delivering a further blow to Britain’s embattled high streets, after suppliers refused a request for a £300 million lifeline for the struggling retailer.
The future of the music retailer’s Irish operation, which employs 293 staff at 16 outlets according to accounts filed last year, is unlikely to become clear until after an administrator is appointed to the British parent. There is no equivalent procedure to administration in Irish company law.
Deloitte, which has been advising HMV’s lending banks, is being lined up as administrator to the chain, putting 4,000 jobs at risk. HMV declined to comment.
The expected administration continues the grim start to the new year for the high street, following the collapse of Jessops, the camera retailer, which closed on Friday, with the loss of 1,400 jobs.
Late last week, HMV asked its suppliers, which include music labels, games makers and film companies, for about £300 million in additional financing to pay off its bank debt, and fund an overhaul of the company’s business model.
But the proposal was turned down, raising fresh fears that the company would be forced into administration.
The retailer has been hit by the migration to purchasing music and films online. It sought to combat this trend, diversifying into live venues and consumer electronics, but this was not enough to stem the decline in its core market.
A year ago, suppliers stepped in to support HMV, taking a 5 per cent equity stake in the company to secure its position as the UK’s leading entertainment retailer. The closure of HMV could strike a damaging blow to the UK retail market for video games, CDs and DVDs. – (Copyright The Financial Times Limited 2013)