HMV Enters Administration for 2nd Time in Its History, Blames DVD's Demise
U.K. home entertainment software retailer HMV entered administration for the second time in its history, confirmed parent Hilco Capital Friday. It blamed HMV's financial troubles on “extremely weak” holiday sales and the “further deterioration” in U.K. demand for physical CDs…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
and DVDs. HMV’s 125 stores across the U.K. “will continue to trade whilst negotiations are on-going with the major suppliers in the music and movie industries,” said Hilco. It’s also seeking buyers for the HMV business “as a going concern,” it said. “In the six years since the HMV business was rescued from a previous Administration process," the company "has captured market share from all of its competitors,” said Hilco Executive Chairman Paul McGowan. “It is disappointing to see the market, particularly for DVD, deteriorate so rapidly in the last 12 months as consumers switch at an ever increasing pace to digital services.” He estimated industry DVD demand in the U.K. fell 30 percent in the holiday selling season from the same 2017 period. HMV sold 31 percent of all physical music in the U.K. in 2018 and 23 percent of all DVDs and Blu-rays, “with its market share growing month by month throughout the year,” said Hilco. "Industry consensus" is that physical media sales will fall by another 17 percent in the U.K. during 2019, it said. As a result, the HMV board “concluded that it will not be possible to continue to trade the business,” it said.