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HMV to enter administration

Date Added: 15/01/2013  

Thousands of jobs around the country are at risk as entertainment store HMV is entering administration due to its financial problems.

In a statement, the company revealed that trading in HMV shares on the London Stock Exchange has already been suspended.

Deloitte will keep HMV's 239 stores in the UK and the Republic of Ireland open for now while it assesses the possibility of finding a buyer for the ailing firm.

Customers have been informed that HMV stores around the UK will not be accepting gift vouchers or issuing any more.

HMV said: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect."

HMV's share price dropped dramatically in the middle of December when the company warned that it faced a possible breach of bank loan agreements.

The business announced a month-long sale with 25 per cent off prices starting earlier in the month, but the directors appear to have decided there is no way back for the famous brand.

HMV has been a regular presence on high streets all over the UK, but was hit by the increasing tendency of the British public to do their shopping online rather than in bricks-and-mortar stores.

The statement released by HMV continued that the board "understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business".

Deloitte is currently handling the administration of fellow high street chain Comet, with hundreds of jobs expected to be lost as a result of the firm's financial difficulties.

Comet previously employed more than 6,500 people in the UK, but hundreds have already been told they are being made redundant.

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Posted by Julie Cutts

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