HMV's plans to launch an indirect mobile offer are under threat after the beleaguered entertainment retailer called in administrators.
In a statement last night (Monday), HMV suspended trading in its shares but said the administrators would continue to trade the stores while they seek a purchaser for the business. The news closely follows the sudden closure of Jessops 147 camera stores last week and the demise of electrical retailer Comet. The three companies were the latest high street victims of a shift to online shopping and digital formats, cut throat competition from Amazon and the supermarkets and the ongoing recession.
The entertainment retailer, which runs 236 stores and employs over 4,350 staff, has appointed accountancy firm Deloitte as administrator after HMV's suppliers declined to raise £300m of additional funding to help the retailer pay off its debt burden, as part of a planned radical restructuring of its business.
Mobile operator EE pulled out its Orange concessions in HMV late last year. The 28 concessions employed 100 staff but were closed down in October as part of the operator’s rebrand to EE. Staff were transferred to nearby EE stores. Following the closure of the concessions the operator was in talks with HMV about an indirect deal.
HMV was also in the process of rolling out O2’s free Wi-Fi service and Priority Moments retail offers at its stores last year after a trial run at its Cambridge store. Both deals were part of the moves by the multichannel retailer to focus on digital services, in a further bid to offset falling sales in its core retail business.
Author: Carol Millett