Over 2000 jobs on the line as HMV rescue deadline looms

The fate of struggling entertainment retailer HMV will be decided this week.

The company’s administrator, KPMG, has set a deadline of January 15 for potential buyers to make an offer.

According to Sky News, retail industry sources said the firm received several credible expressions of interest over the weekend – although analysts remain sceptical that a binding offer for an outright purchase will emerge.

HMV employs around 2,200 people and operates more than 125 stores.

The first time it fell into administration was in 2013, when it was a publicly traded company. Investment firm Hilco Capital bought HMV’s debts and acquired the group in a‎ £50m rescue deal months later.

Its latest collapse came during a poor Christmas trading period for retail in general – believed to be the worst in a decade.

Paul McGowan, executive chairman of HMV and Hilco, said in a BBC report: “Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”

Speaking further, he pointed out that while HMV was behind 31% of all physical music sales in the UK and 23% for DVDs and Blu-rays last year, the industry consensus was that the market would fall by a further 17% in 2019 – making it impossible for HMV to continue trading in its current form.

KPMG partner Will Wright said on the day of the firm’s appointment as administrator: “For decades, HMV has been one of the most iconic names on the high street.

“Whilst we understand that it has continued to outperform the overall market decline in physical music and visual sales, as well as growing a profitable ecommerce business, the company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industry.”

He added: “This has been in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures.”

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