Late last night, probably in some tense boardroom at the top of a skyscraper, High Street giant HMV made the call to pull the plug and appoint administrators. This follows in the recent illustrious tradition of High Street tech stores biting the dust: first Game, then Comet, Jessops, and now HMV have gone into administration. Are you sad to see them go?
A quick note of caution: HMV hasn’t actually sunk yet. It’s teetering on the edge of the abyss, staring down into the void, but it’s still clinging onto the edge by the vinyl-coated tips of its fingers. As of this morning, the chain is still trading, and while Deloittes (hiss! boo! the dirty capitalists) has been appointed as administrators, it’s said that it’s going to try and find a buyer for the store, rather than just cutting its losses and running.
What does “administration” actually mean? Well, it’s rather like bankruptcy for companies, but in the UK, companies can’t actually go ‘bankrupt’; rather they become insolvent and enter administration. When a company enters administration, they ditch the board of directors and appoint an administrator (in this case Deloittes), which is charged with a ‘public duty’ of rescuing the company, or if the company is beyond saving, organising an orderly windup and distribution of the assets to obtain the best result for the creditors.
In plain English, this means they try and save the company, and if nothing can be done, they sell everything off (hence why many bankrupt firms have fire sales); once the selling is done, they pay off everyone who’s owed money as best they can (there’s a list of who should get paid first).
At this point, HMV and Deloittes are still at the “trying to save the company” bit of the proceedings. Deloittes has taken over the day-to-day running of the company; stores should remain open for the next few days at least, while Deloittes try to find a buyer for the firm. So, the stores are still open, but trading on HMV shares has been suspended, and most importantly, the stores won’t be accepting gift vouchers or cards any more.
If Deloittes fails to find a backer, then we’ll see all 238 stores shut down, 4,000 staff laid off, and most likely all the stock flogged off at bargain-basement prices. I’m sad to see it go; although the physical-music-selling business that HMV was founded on has tanked, the store’s made a good attempt to diversify, with DVDs, posters/t-shirts/other groupie crap, and possibly the best range of audio technology on the high street. I’ll admit that I have in my time bought headphones from HMV, and pick up DVDs fairly often as gifts for people. I honestly don’t know where I’m going to do that any more.
I think that if HMV goes, it will be a genuine loss for Britain’s High Streets. Yeah, it wasn’t the best retail store around, but it’s far from the worst; moreover, the loss of 4,000 jobs is tragic and worrying. Even with the growth of internet shopping, bricks-and-mortar stores still have a place for discovering new products and convenience. As a nation, I think we’ve lost out on both those things. What do you reckon though? Glad to see them go? An unavoidable loss? Or some fault of the money-grabbing capitalist world? And who’s next?