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Deloitte administrators to close 66 HMV stores

Administrators announce the closure of 66 stores in the coming two months and 930 possible redundancies

07 Feb 2013 Accountancy Age

By Rachael Singh

HMV shop

DELOITTE ADMINISTRATORS have confirmed a nuumber of store closures at collapsed music retailer HMV.

Nick Edwards, Rob Harding and Neville Kahn, Deloitte partners, were appointed joint administrators to HMV Group, HMV Music, HMV and Fopp Entertainments on 15 January.

The administrators said that 66 stores, which employ 930 staff, will close. No fixed date has yet been set for the closure of these stores which will continue to trade for now. However, the closure is expected to take place over the next two months. HMV currently operates 220 stores.

Edwards said: "As part of our ongoing 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."

Earlier this month the administrators announced they had sold HMV's majority shareholding in entertainment venue G-A-Y, which includes bars and the Heaven nighclub, to its founder Jeremy Joseph.

The administrators announced on 31 January that it would make 186 redundancies in the retailer's head office and distribution centre. 

Investment group Hilco bought HMV's secured debt on 23 January, reportedly from Lloyds and the Royal Bank of Scotland.

It has been reported that HMV had a net debt of about £140m, with Hilco paying about £15m to control that debt. The investors are expected to pay a further £19m to the lenders at a later date, which means the secured lenders will receive just 25p for every pound owed.  

Some of the stores to close are based in: Bayswater, Birmingham, Leeds, Manchester, Trocadero, Watford, Edinburgh Fort, Glasgow Silverburn and St Albans. 

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