December 28th, 2018, 20:04 Posted By: wraggster
Entertainment retailer HMV faces administration for a second time.
The music, DVD and games specialist filed a notice last week that it intends to appoint administrators, amid failed talks with suppliers.
2,200 jobs are at risk.
HMV chairperson Paul McGowan said that the DVD sector had declined 30 per cent over the Christmas trading period, and that although HMV "performed considerably better than that, such a deterioration in a key sector of the market is unsustainable."
He added: "HMV has clearly not been insulated from the general malaise of the UK High Street and has suffered the same challenges with Business Rates and other government-centric policies which have led to increased fixed costs in the business.
"Business rates alone represent an annual cost to HMV in excess of £15m. 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.
HMV first entered into administration in January 2013 but was rescued by Hilco. The firm renegotiated deals with its suppliers to make it a more profitable business. It was the movie and music industries that proved the most accommodating to new terms, which saw HMV reduce its focus on video games.
However, HMV does still stock an array of video game goods and merchandise. If it does cease trading, it will be the third sizeable games retailer to close in the UK this year, after Toys R Us and Grainger Games. Other games stores to close in the UK this year included Scottish chain Games Centre and online retailer GameSeek.
Before entering administration in 2013, HMV was looking to change its business so that it focused on entertainment experiences over retailing. It invested in the Gamerbase concept (similar to GAME's Belong arenas), where people could play games. The retailer even had its own cinema and operated a number of music venues.
Unfortunately, these new business areas were not growing fast enough to counter the declines suffered in physical CDs and DVDs, and HMV ended up selling and closing these new ventures in an effort to free up capital.
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