Tue, 15 Jan 2013 | ADMINISTRATION
HMV is to enter administration after confirming that it will call in administrators from Deloitte today (Tuesday, 15 January).
The high street music and video retailer issued a statement last night, explaining that it has been unable to continue in its current situation: “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 and certain of its subsidiaries with immediate effect.”
Rumours regarding the security of HMV's future resurfaced just last weekend when the company announced that it was to run a 25 per cent off sale for another four weeks, just when retailers are traditionally starting to wind up their seasonal discounts.
The move coincided with discussions between the retailer and its banks over new terms for the music chain's debt. It was seen as a sign that HMV was struggling to meet its debt repayments and analysts agreed that things were not looking good.
Many people's fears have now been confirmed and the 250-strong chain has become the latest high street casualty, with 4,500 jobs left at risk.
Nick Edwards, Neville Kahn and Rob Harding of Deloitte are set to be appointed as administrators and it looks like the business could be for sale in the near future. The company statement added: “The directors understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.”
Speculation about potential buyers for the chain has already begun. It had been thought that Apollo Global Management, a US vulture fund, would consider putting in a bid, but although Apollo bought six per cent of the company's bank debt two weeks ago, it is no longer interested in buying the whole chain. Meanwhile, restructuring firm Hilco is thought to be interested due to its successful purchase of HMV Canada in 2011.
Stores are expected to open today, but gift vouchers are no longer being accepted or issued by the company.
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