HMV will continue to accept customers ‘ gift cards so long as stores keep trading, administrators KPMG have said. It comes after the High Court appointed KPMG to run the music retailer, which collapsed for the second time in six years after a sharp fall in sales. In 2013 administrators faced an angry backlash after initially telling customers their present vouchers would not be honored – before making a U-turn. KPMG will certainly try to maintain all 125 shops open while a buyer is sought.
Will Wright, from KPMG, said: ” Over the coming weeks, we will endeavor to continue to operate almost all shops because a going concern whilst all of us assess options for the business, including a possible sale. ” Customers with present credit cards are advised that the credit cards will become honored since usual, while the business continues to trade. “Owners Hilco, which took the company out of its first administration in 2013, blamed a “tsunami” of retail challenges, which includes business rate levels and the fact that many clients now download or stream all their music rather than seek physical copies on CD or vinyl.
It stated the outlets, which employ 2, 200 staff, would continue to trade while negotiations were held with major suppliers and it looked for buyers. Paul McGowan, executive chairman of HMV and its owner Hilco Capital, explained: “Even an exceptionally well-run and much-loved organization such because HMV cannot withstand the tsunami of difficulties facing UK retailers over the last 12 months on top of this kind of a dramatic change in consumer behavior in the entertainment market. inch
He pointed away HMV sold 31% of all physical copies of music in the UK in 2018 and 23% of all DVDs and Blu-rays – as well as marketplace share, had grown month by month throughout the year. But he added that the industry consensus was that the marketplace would fall by another 17% during 2019 and therefore it would not end up being possible to continue to operate the business. Digital music revenue overtook product sales of physical formats intended for the 1st period in 2012.
Since then, online shopping, downloads, and streaming provided by platforms such as Amazon, Spotify and Netflix, have continued to eat into product sales of physical music. While Christmas is normally a period of higher revenues for merchants, the number of shoppers hitting the post-Christmas revenue dipped this 12 months. Britain’s retailers possess also confronted uncertainty more than Brexit, which sparked a fall in the pound and therefore raised the price of imported goods, as well as rising labor costs, higher business property taxes and unseasonably warm weather.
HMV, known for its iconic logo featuring the “dog and trumpet”, is the UK’s last surviving national music retail chain.