Trevor Moore, the chief executive of music, DVD and video games retailer HMV Group plc (LSE:HMV), has expressed confidence in the future of the business, despite the company’s announcement this morning that it was appointing Deloitte as administrator.
HMV, Britain’s last remaining national music retailer, said late Monday that it intended to go into administration. Its shares have now been suspended from trading on the London Stock Exchange, and in a statement this morning HMV’s board said that it had been “unable to reach a position where it feels able to continue to trade outside of insolvency protection.”
The failure of HMV comes just days after camera retailer Jessops collapsed. Electrical goods chain Comet also closed its last stores for the final time just before Christmas, and earlier in 2012 JJB Sports and Clinton Cards went into administration.
HMV employs more than 4,000 people. Its stores are expected to stay open for the time being, while a buyer for the business is sought, although staff will not be accepting payment with gift vouchers.
Commentators this morning blamed HMV’s demise on competition from Internet based retailers and the 91-year-old company’s failure to adapt sufficiently to the changing retail environment.
Moore said today that the management remains “convinced we can find a successful business outcome.” He pointed out that physical formats still represent three quarters of all music sales, indicating that there is a future for firms selling CDs.
If HMV fails to survive it could have a significant impact on the UK retail market for CDs, DVDs and video games. According to retail research specialist Verdict Research, HMV had a 22.2% share of the music and video market in 2012.