Administrators for stricken retailer HMV have ended weeks of speculation with the announcement that store closures will be taking place throughout the next few weeks.
Following restructuring firm Hilco’s buyout of HMV’s mountain of debt it did seem as if the company and its employees would escape any further trauma. However this is not to be, with Deloitte revealing that 66 branches across the country set to close – leaving almost 1,000 members of staff out of work.
Every country in the UK will see at least one branch of the entertainment retailer close down, with Wales being the least affected and England sustaining the heaviest casualties. While only the Wrexham store will have to shut up shop, Edinburgh alone will see five closures and London four.
Sadly, among those London stores in line for the axe is HMV’s flagship property on Oxford Street, with administrators already laying down plans for the sale of its lease to the highest bidder.
Nick Edwards, a joint administrator from Deloitte, says; “As part of our on-going review of HMV’s financial position, we have now completed a review of the store portfolio and have identified 66 loss making stores for closure.
“This step has been taken in order to enhance the prospects of securing the business’ future as a going concern.
“We continue to receive strong support from staff and are extremely grateful to them for their commitment during an understandably difficult period. All other key stakeholders remain very supportive and I continue to be hopeful of securing a future for the restructured business.”
At present, Hilco looks to hold the most promising future for the entertainment brand, especially considering its ownership of HMV Canada and rumoured backing from record labels such as Universal Music, Sony and Warner Music.
While the restructuring firm has already taken over the retailer’s debts, this gives the group a controlling share but not yet the ownership rights over the HMV brand.
Industry experts predict that Hilco will wait to bid for ownership of HMV UK until administrators had performed the necessary studies to “trim the fat” by ridding the chain of unprofitable stores.
Now that this step has indeed been taken, it can hopefully only be a matter of time before the group can purchase the brand and take the necessary steps to put the retailer back on its feet.
This is likely to be of little comfort to the estimated 930 employees who will be laid off in the near future. Although Deloitte are keen to stress that no formal closure date had been set and stores earmarked for closure would continue to trade in the meantime, loyal workers will no doubt see this move as a betrayal.
They will join the 190 employees who were consigned to the Job Centre queues from HMV’s head office – a group which made their displeasure very public by taking to the business’ Twitter page.
Disgruntled staff hijacked the account and posted a series of messages keeping the press and interested followers up to date with the occurrences as they happened. They posted tweets such as;
We’re tweeting live from HR where we’re all being fired! Exciting!
There are over 60 of us being fired at once! Mass execution of loyal employees who love the brand #hmvXFactorFiring.
Just overheard our Marketing Director (he’s staying, folks!) ask ‘How do I shut down Twitter?
They added that the company they love was being ruined and hardworking individuals who want to make HMV great again were losing their jobs. The leader of the group, who was later identified as Poppy Rose, said;
“I hoped that today’s actions would finally show them the true power and importance of Social Media, and I hope they’re finally listening.”
HMV was forced to call in the administrators after accruing a large pile of debt over the past few years due to its inability to compete with the online marketplace, with a poor festive trading season being the straw which broke the camel’s back. The retailer currently occupies 220 UK commercial properties.
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