British retailer HMV Group PLC, the last high-street music retail chain dedicated to music, entered into administration Tuesday
January 16, 2013 – British retailer HMV Group PLC, the last high-street music retail chain dedicated to music, entered into administration Tuesday, which helps underscore the shift by consumers to shopping online creating more and more pressure on brick and mortar retailers.
The UK chain sells CDs, DVDs as well as other merchandise at 243 stores. The company said that after its discussions with its creditors, it could no longer continue outside of insolvency protection and said Deloitte LLP administrators would be appointed to oversee the closure or sale of the company. If the company closes, it would end 92 years of business in the UK. The retailer has over 4,000 employees who now are at risk of losing their jobs.
HMV is famous for its logo of a dog with a gramophone and said that there are private bidders expected to approach the company according to a buyout firm. The buyout firm, Endless, said it spoke to Deloitte about the possibility of buying HMV out of administration, as they said there was demand for physical products in the marketplace.
The music retailer is just one of many casualties in the retail world in the UK as well as around all of Europe. Stores are finding it difficult to compete on both convenience and price with retailers online. Last week, Jessops, the camera retailer from the UK called administrators as well, while Comet the electronics chain and JJB Sports the sports retailer closed at the end of 2011.
Retailers focusing on entertainment have been the hardest hit, as consumers have increasingly chosen to go online and download movies or music from different vendors like iTunes from Apple or films from Netflix than to leave their house and visit stores.
In 2011, Game Group the video game retailer entered administration, while just last week France’s No. 2 chain for entertainment, Virgin France, filed bankruptcy.