The HMV chain of music and DVD retailers in the U.K. has filed for administrative protection, the British equivalent of Chapter 11 bankruptcy.
The first HMV store opened in London in 1921, and as of today the company is going in to what is known as administration – the U.K. version of bankruptcy – and being delisted from the London Stock Exchange. The company currently operates 239 stores across Britain, Ireland, Scotland, Singapore and Hong Kong, and it employs around 4,350 people globally.
Opened originally as a gramophone record shop with a logo of a dog listening to an album – “HMV” actually stands for ‘His Master’s Voice’ – the company morphed over the years, lessening its reliance on music while increasing its selection of DVDs and Blu-ray. As online competition grew in both fields, and despite increased sales during the holiday shopping season, the retailer has been unable to reach agreements with its creditors to keep things moving.
As with bankruptcy in the U.S. this does not mean that the company is dead and gone, and it could potentially emerge from administration should it find financial backing. ”Certainly, there isn’t a 240-store business out there and I suspect that, if we do get an HMV out of this administration that has a few year’s future, it will be substantially smaller than the company that is existing today,” CMU Daily business editor Chris Cook told the BBC.
Should HMV close, this will be the last of the “high street” music retailers to go as the likes of Tower and Virgin have already shut their doors. All that will be left in the way of music retailers in the U.K. will be online vendors, grocery stores that carry the biggest artists and a selection of independent retailers. Seeing as current surveys of British retail space show that one out of every 10 retail spots are currently vacant, it isn’t surprising to see the one of the last outposts of physical media in an increasingly digital age would have issues surviving.
We’ll keep an eye out for developments in the survival of HMV, but we have to agree with Cook. Should the company even survive, it is going to be a greatly trimmed down version of its former self.