Administrators called in on stricken music chain HMV
Administrator Deloitte is set to assess the future of Westcountry jobs impacted by the collapse of music store chain HMV.
The financial services firm was last night formally appointed as administrator to the 92-year old business, which employs more than 4,000 staff around the UK.
HMV's 238 outlets will remain open while Deloitte attempts to find a buyer for some or all of the business, although it is anticipated that there will be widespread store closures as a result of the collapse.
The music retailer has six Westcountry outlets, in Exeter's Princesshay, the Drake Circus mall in Plymouth, plus Torquay, Truro, Taunton and Yeovil, with Dorset branches in Poole and Bournemouth.
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HMV's collapse follows in the wake of photography chain Jessops' demise last week, which saw 192 stores close, including ten in the Westcountry, on Friday.
Jessops administrator PwC said that a total 65 jobs had been lost in outlets across Devon, Somerset, Cornwall and Dorset, with stores in Penzance, Truro, Plymouth, Torquay, Exeter, Barnstaple, Taunton, Yeovil, Poole and Bournemouth hit. The Exeter outlet had the highest staff head count, with ten employees located there.
The administrator has kept a skeleton staff on in some stores, while stock is returned to a central warehouse for dispatch back to suppliers. A spokesman said: "There will be no fire sale." Meanwhile, HMV's administration means that vouchers and gift cards, many of which were given as Christmas presents, are now worthless.
Squeezed by internet retailers and supermarkets, whose scale has enabled them to offer CDs and DVDs at cheaper prices, HMV's boss Trevor Moore warned before Christmas that the entertainment group was in trouble.
Mr Moore said the group would fail to meet expectations for the year to April and that it would breach the terms of its loan agreements later this month.
Suppliers including Universal Music came to HMV's rescue in January 2011 with a deal which helped the retailer shed some of its huge debt pile.
But according to the Financial Times, they balked at a request last week from HMV for about £300 million in additional financing to pay off its bank debt and fund an overhaul of the company's business model.
State-backed banks Royal Bank of Scotland and Lloyds Banking Group were lenders to the group. RBS said in a statement yesterday: "The banking group led by RBS and Lloyds Banking Group have provided significant support to HMV over the past two years, as it has sought to reshape and restructure its business in the face of extremely difficult trading conditions.
"Unfortunately, despite the best efforts of management, lenders and suppliers, it has not proven possible to avoid a formal insolvency process."