HMV, Britain’s biggest high street music retailer, is on the brink of becoming the first post-Christmas victim of Britain’s brutal high street environment by collapsing into administration for the second time in six years.
Sky News has learnt that HMV Retail filed a notice of intention to appoint administrators last week amid desperate last-ditch talks with suppliers.
Sources said that the chain, which trades from 130 shops and employs about 2,200 people, had been in talks in recent days with leading names in the recorded music industry to seek financial support from them.
However, those discussions are not thought to have produced sufficient assurances to underpin HMV’s finances, casting doubt on the survival of a retail name due to mark its centenary in 2021.
An announcement about KPMG’s appointment as administrator is expected later on Friday, according to insiders.
The disappearance of the last major specialist music retailer on the high street is something the record labels have been keen to avert for years.
HMV, which was then a publicly traded company, fell into administration in January 2013.
Hilco, which this year bought Homebase, purchased the group’s debt and acquired the business in a £50m deal.
Music industry sources said the rise of streaming services had “decimated” HMV’s business and made its future operation unsustainable.
The chain’s likely collapse into administration comes amid expectations of a bloody Christmas trading period for the retail industry, with sales having been impacted by last month’s Black Friday promotional bonanza.
2018 had already seen tens of thousands of jobs disappear from the high street following the collapse of Maplin, Poundworld and Toys R Us UK.
Other retailers including Carpetright, Mothercare and New Look have shed stores and jobs through agreements struck with creditors.
Next will be the first of the major high street chains to update the City on its Christmas trading performance when it issues a statement on 3 January.
A report by the KPMG/Ipsos Retail Think Tank published this week said the sector would face renewed pressures this year because of shifts in consumer behaviour, an over-supply of shops, high levels of debt and the cost of regulation.
Paul Martin, the UK head of retail at KPMG, said: “It is too easy to point the finger at Brexit as the singular cause of all the woes in the industry.
“There is a much wider array of forces at play. These forces are by no means new.”
The news of HMV’s impending collapse comes just two days after Jake Berry, the high streets minister, launched a £675m Future High Streets Fund earmarked for modernising town centres across the UK.
Coincidentally, the music and entertainment retailer’s move to file for administration also comes within hours of a government announcement that it would seek to strengthen protection for consumers who prepay for products in the event of a company’s insolvency.
Retail sources cast doubt on the likelihood that a buyer would want to acquire the whole of HMV in its current form.
Hilco and KPMG declined to comment on Friday.