Hilco-backed HMV enters administration

Denise Ko Genovese
02 January 2019

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Hilco Capital-backed UK music retailer HMV has appointed KPMG as administrators, six years after having been acquired by the GP out of administration.

The accountancy firm was appointed after Christmas as HMV continued to suffer from the declining UK market for CDs and DVDs.

In a statement, Hilco said Christmas footfall had been extremely weak. The company also cited the wider challenges on the UK high street including an increase in business rates and other "government-centric policies" that "led to increased fixed costs in the business".

The group's 125 UK stores will continue to trade while talks are held with its major music and film suppliers and a buyer sought for the business as a going concern, the statement said.

Under Hilco's tenure, the group attempted to refocus on music, having previously diversified into the electronic retailing market. The company looked to sell items that provided higher profit margins, such as music merchandise and vinyl. It also relaunched its e-commerce business, renegotiated rental agreements at numerous stores and relocated others.

Previous funding
HMV entered administration in January 2013. Hilco purchased the group's debt and acted as agents to the administrator Deloitte to ensure the stores continued to trade.

Hilco then acquired the business in a £50m transaction in April 2013. As part of the deal it provided £25m in working capital to the business.

Company
Founded in 1921 and headquartered in London, HMV is a music and electronic entertainment retailer.

People
HMV – Paul McGowan (executive chairperson).