Staff at HMV’s 239 stores are today (15 November) awaiting further updates, with many now facing an uncertain future. HMV is the latest major high street name to suffer financial difficulty, and the news comes less than a week after camera chain Jessops shut all of its 187 stores, resulting in the loss of 1,370 jobs.
The Retail Trust Helpline saw a significant increase in calls following news of Jessops’ demise, and even larger surges in demand for its services are expected in the coming days.
Administration is just one in thousands as trend in decline rises
Commenting on the HMV situation, Chris Ratten, Head of Restructuring at RSM Tenon, points out the sheer number of companies in distress:
"HMV has shown signs of distress for many months and today's news is not unexpected. Increased online competition and the increase of music downloads has caused HMV to be the latest victim. Those retailers who are able to forecast and adapt quickly to customers’ demands and manage their cost base effectively will be those who survive and be successful. There is clearly a strong link with people’s technology buying habits in the recent cases including Comet and Jessops”.
“In 2012, approximately 1,300 retailers were insolvent, a rise of 7 per cent when compared to 2011. We expect this year to be worse as those who have managed to teeter on the edge for the last few years will really feel the full effects of the reduction of discretionary spending, fierce competition and reducing cash reserves. According to our latest Tracker research, we believe that 12,679 retailers have a high risk of insolvency out of over 100,000 retailers nationally. When compared to December 2011, those at high risk have actually increased by 40 per cent”.