Press release -
HMV and Jessops the latest casualties of the UK High Street
The UK High Street has been suffering in the consumer downturn as customers have been watching their pennies amid concerns about high inflation and job security.
HMV and Jessops are two of the latest companies to fall into administration, amid fears the days of the old fashioned High Street could be over.
Yesterday, Music and DVD chain HMV announced it was to appoint an administrator, making it the latest casualty on the High Street and putting about 4,350 jobs at risk.
Sales of CDs and DVDs have been undermined by competition from supermarkets, online retailers and online downloads. An expansion into live music (now abandoned) and sales of electrical gadgets have failed to stem the overall sales decline.
Administrators from Deloitte are expected to keep HMV's stores open while it assesses the prospects for the business and seeks potential buyers.
The company has been in financial crisis for more than a year, and on 13 December warned that it faced a possible breach of bank loan agreements, sending its share price plummeting.
The retailer, whose first store was opened in London's Oxford Street in 1921, has seen its debts mounting as it sold off parts of the business, notably its live entertainment arm and the Waterstones book chain.
HMV's statement on administration comes just days after fellow retailer, Jessops, announced it would be clearing all stock from its stores after administrators announced it was unable to continue trading.
PricewaterhouseCoopers (PwC), which was appointed to the group last Wednesday, has begun the process of shutting the firm's entire network of 187 stores with the loss of 1,370 jobs.
It has been hit by increasing competition from supermarkets and internet retailers. In addition, the improving quality of cameras on smart phones means people think less about buying a dedicated camera.
Jessops was forced to call in the administrators this week after talks between the company and its lender and suppliers broke down following a poor Christmas.
Jessops had struggled since 2007, when it underwent a major overhaul with a swathe of store closures. It came close to collapse two years later, before being rescued by its main lender HSBC in a controversial debt-for-equity swap that saw it taken off the stock market.
For more information on the UK High Street, see the latest research: UK High Street
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