UK music, film and game retail chain HMV is set to go into administration as soon as tomorrow.
The 92-year old company has been struggling for quite a while now, battered by the recession, supermarkets, online retailers and digital downloads. In an effort to handle their spiraling debt, HMV sold off the book store Waterstones for £53m and the Hammersmith Apollo for £32m. But it wasn’t enough to tackle the estimated remaining £220 million in debt, and neither was a desperate 25% off sale that ran last week after Christmas sales disappointed.
Last month, HMV’s suppliers pledged £40 million in backing to help the retailer, but it is believed they have now turned down another request for £300 million. Professional services firm Deloitte is rumored to have been brought in to help manage the administration and decide what will happen to the 235 stores and around 4,350 employees.
When HMV first floated on the London Stock Exchange in May 2002, it was valued at £1bn. Today, its shares closed at 1.1p valuing it at £4.7m.
We can only hope that whatever is decided by the administrators will be best for the employees at risk. Stick to PSLS as the story develops.
