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Famous British music chain HMV has filed for bankruptcy for the second time. After a much more modest restart in 2013, the “tsunami of challenges for British retailers” has brought them down again.
125 shops closed, 2000 jobs in danger
British shopping streets are facing hard times and the retail crisis has claimed yet another victim: HMV – famous for decades as the record company with the dog and the gramophone in the logo – has filed for bankruptcy. The end-of-year period failed to save the chain. HMV and its 125 shops are being placed under guardianship and consultancy firm KPMG has been charged with the task of looking for an acquirer, trying ro keep the shops open for now. Over 2000 people are currently employed by the chain.
HMV’s second bankruptcy is particularly grievous for the retail industry in the UK. The first one, in 2013, caused enormous damage to shopping streets where large stores in prominent locations were suddenly empty. It was the beginning of the retail crisis which has been raging ever since.
Investor Hilco Capital then bought the remains of the chain for as little as 50 million pounds, just like it did when it acquired Free Record Shop. Now Hilco is pulling the plug as well, because of the enormous competition from streaming services such as Spotify and from e-commerce. HMV still represents nearly a third of British CD and vinyl record sales, but the market is shrinking rapidly.
“Tsunami of challenges”
“Even an exceptionally well-managed and beloved business like HMV can not stand up to the tsunami of challenges British retailers have been facing in the last year, in addition to the consumers’ dramatically changing behaviour in the entertainment industry”, explains CEO Paul McGowan to Belgian newspaper De Tijd. Among these challenges are brexit, rising wages and high real estate prices despite low consumer trust in the United Kingdom. British online fashion retailer Asos and sports chain Sports Direct saw their worst results ever in November.
HMV, short for His Master’s Voice, has had an illustrious history: the record store started in 1921 in London’s Oxford Street and later became the foundation for record company EMI. At its height, the chain was quoted and even contributed to the breakthrough success of The Beatles. At that time, HMV used to spread demo recordings of up-and-coming bands to record companies.
