London: Music chain HMV has called in administrators from Deloitte, putting 4,350 jobs and 238 stores at risk as it is on the brink of collapse.
The 92-year-old music chain’s sales have fallen by fierce competition from online music retailers, digital downloads and supermarkets. It has also been saddled with 220 million pounds of bank debt.
HMV said talks with banks and stakeholders to try to avert a looming breach of its banking agreements had been unsuccessful. Its shares were suspended with immediate effect, the Telegraph reports.
HMV said that the chain’s administrators intend “to continue to trade while they seek a purchaser for the business”.
The company had been expected to issue a crucial Christmas trading update this week.
Ian Kenyon, its chief financial officer, told The Daily Telegraph that Christmas trading had been “slightly behind expectations”.
According to the report, Kenyon said the chain’s suppliers had been “amazingly supportive” and were “working hard” to try to find a future for HMV on the high street.
HMV had warned last month that its future was in “material uncertainty” and it was likely to breach banking covenants. Half-year like-for-like sales had fallen 10.2 percent and the group posted a loss of 36.1 million pounds.
HMV raised cash last year by selling off book store Waterstones for 53 million pounds and the Hammersmith Apollo music venue for 32 million pounds, the report said.
It has also shifted its emphasis from the fast-declining CD and DVD market to new technology products.
According to the report, the demise of HMV is the latest blow to the high street, which has seen stores such as JJB Sports and Comet collapse in recent months.
First Published: Tuesday, January 15, 2013, 18:17