Day the music died

 
Kasmira Jefford
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HMV has collapsed into administration after last-ditch attempts to save the crisis-hit music retailer came to an abrupt end last night, putting 4,000 jobs at risk and signalling the end of more than 90 years on the British high street.

Deloitte, which has been advising HMV’s consortium of lenders led by Lloyds Banking Group and Royal Bank of Scotland, has been appointed as administrators to the beleaguered firm.

“The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection,” HMV said in a statement last night.

Deloitte could still find a buyer for some of HMV’s 230 stores across the UK, with the shops expected to carry on trading while a purchaser is sought.

Trading in the company’s shares, which closed at just 1.1p last night, will be suspended from this morning.

Hopes were raised that the historic UK brand could be saved last month, when US private equity firm

Apollo Global Management – which has been buying up some of HMV’s debt – was reported to be plotting a takeover of the firm.

But yesterday a source familiar with the situation said Apollo had no intention of make any bid for its outstanding debt.

HMV is the second major high-street name to collapse so far in a dreadful start to the New Year for UK retailers, after specialist camera chain Jessops was liquidated last week with the loss of 2,000 jobs, spelling further bad news for Britain’s fragile retail sector.

Last year saw the collapse of Comet, JJB Sports, Clinton Cards, Game Group, Peacocks and Blacks Leisure.

The firm, which opened its first flagship store on Oxford Street in 1921, has struggled to survive in a fast-declining music, DVD and games market, and has faced intense competition from internet retailers and the rise of digital downloading.

It has tried to turn itself around by focusing on new consumer technology products, live music and event ticketing, as well as making efforts to pay down debt by selling both its Waterstone’s book chain and its Canadian retail arm.

In May the group also offloaded the Hammersmith Apollo music venue for £32m, allowing it to extend its £220m bank facility.

But it has failed to stem declining sales and in December HMV warned it was likely to breach its banking agreements after a poor start to Christmas trading, sending shares down 40 per cent on the day.

HMV, led by former Jessops chief executive Trevor Moore, has since been locked in talks with its syndicate of eight lenders over its debt, which stood at £176.1m at its half year to 27 October.

Pressure mounted this weekend after the group launched a 25 per cent sale of products in a last ditch attempt to boost stricken sales.