Anyone who still has a gift voucher for any of the HMV shops should cash them in right now. HMV is about to collapse into administration, see stores closed and around 2,000 jobs now at risk. The company has around 130 shops across the UK, which include nine Fopp outlets.

The Independent quotes Will Wright, a partner with KPMG and joint administrator, as saying that while HMV had continued to outperform in music and video sales, despite the current market decline, as well as being a profitable online business, HMV has suffered due to an ongoing wave of “digital disruption” which is occurring throughout the entertainment industry.

High Street retailers under threat

Wright went on to say that besides the e-commerce threat, many high street retailers are being threatened by “weakened consumer confidence,” as well as business rates pressures and rising costs. He said in the coming weeks they will be endeavouring to continue the operation of all stores as they assess options for HMV, including the possibility of a sale.

Wright pointed out that anyone with gift cards should probably use them soon as the cards will be honoured for now. However, should HMV close, gift cards will be void.

Second time HMV has collapsed

The company first went into administration back in 2013 due to rising online competition from the various music streaming services. At the time, Hilco bought HMV for £50 million, saving 140 of the 230 stores at that time. 15 stores have closed since that time.

Paul McGowan, executive chairman for HMV and Hilco, said since the business was rescued six years ago, the whole team has been working hard and engaging with the business to capture market share from these competitors.

However, he did say it was disappointing to see the market, especially for DVDs, turn bad, as customers switch to using online digital services.

The BBC quotes Mark Saunders, a retail analyst, as saying in 2013 that the digital era was making HMV’s business “increasingly irrelevant and unsustainable, due to 73.4 percent of film and music being downloaded or purchased online from the streaming services.

It seems his words were on the money.

That report noted that when the Oxford Street shop reopened in 2015, HMV overtook Amazon for a while as the largest seller of physical DVD and music in the UK. Also, earlier in 2018, Hilco boasted that the company had achieved the “Turnaround of the Decade” award as an entertainment retailer. Since then a further wave in the digital revolution has stopped that “turnaround” in its proverbial tracks.