British music retailer HMV may be going the way of Sam Goody, and the record seller has entered the “equivalent of bankruptcy” as 2013 kicks off.
HMV currently operates 239 stores and has about 4,350 people working for the brand in the UK, and early today the retailer announced the chain was going into “administration,” a process similar to bankruptcy in the UK.
As of Tuesday, HMV has been suspended from the stock exchange, and according to the New York Times, the company’s failure to reach an agreement with creditors regarding debts outstanding prompted the reorganization — which could include a change in ownership for the 118-year-old brand.
After the HMV closing potential was disclosed, the British Retail Consortium’s director general, Stephen Robertson said in a statement that similar challenges are faced by many retailers in the UK due to a flagging economy and changing retail landscape that includes competition from new, cost-cutting rivals like Amazon and iTunes.
Robertson says of the possible HMV closing to expect more of the same in a new, brutal retail space:
“Financial challenges for both customers and retailers are far from over … Many retailers are battling stagnating sales and rising costs.”
But BBC DJ Steve Lamacq told the broadcaster that it isn’t just a changing market that led to the potential HMV closing — he says that the retailer also made some changes in recent years that alienated music buffs and old-school record store shoppers:
” … since it began to move towards being an entertainment supermarket, the selection of material on offer for a bloke such as myself began to shrink … It doesn’t feel like a record shop when you walk in. If you’re looking for the reggae section at HMV, you have to go through games, past the remaindered books, then into the T-shirt section, then past some weird gadget shop – and you eventually find yourself by metal and reggae, hiding in a corner just behind.”
The DJ added:
“In the end, you think ‘you’re dedicating more space to things I can listen to music on, rather than the music itself’. That was weird.”
Despite buzz of an HMV closing, the chain accounted for 22 percent of music sales in the UK last year.