HMV, the iconic British music and entertainment chain, and over 4,000 jobs in the company face an uncertain future.
The company confirmed on Tuesday that Deloitte will be called in as its administrator, after talks with creditors failed.
Following the announcement, and the suspension of HMV shares, shops remained open and the company continued to trade online, though it said it would neither be accepting or issuing gift vouchers. However, the question of whether the group will succeed in finding a buyer for the entire business, or some subsidiaries remains unanswered, as a number of potential buyers, including a fund that bought a sizable stake in the company, denied interest.
While the news provoked an outpouring of nostalgia on Twitter, it came as little surprise to the market.
Online competition
The company has been struggling to contend with online competition from the likes of Amazon, and iTunes for several years now, despite making a number of attempts to bring in new revenue streams, including by selling gadgets, such as tablets, speakers and headphones in its stores and online, though the core of its business remained on the high street.
“Not only did HMV fail to wake up to the reality of the shifting retail landscape from high-street to online in the late 1990s, it also failed to transform its business model when new players entered the market,” said Ajay Bhalla, professor of global innovation management at Cass Business School.
Over the past year, a number of British retailers have closed or filed for administration, under the weight of online competition including Jessops, a well-known camera store chain, and Comet, an electrical store chain. HMV is perhaps the best known of those, with its dog-and-gramophone brand recognised across the world, and a history dating back over 90 years.