As troubled music retailer HMV goes into administration, putting 4,500 jobs at risk, the company says it still has a future.
Bosses at HMV said they are "convinced" they will secure a future for the business despite the appointment of Deloitte as administrator to the 92-year-old company.
The group confirmed today they had struggled over Christmas with disappointing sales, while failure to secure supply of two key tablet computers meant it missed out on surging demand for technology.
The company did not reveal its festive performance but said sales decline remains close to the 10.2 per cent level seen up to October. Some 4,500 members of staff face an uncertain future but Chief Executive Trevor Moore said management remain "passionate" about the chain.
"I would like to personally pay tribute to the 4,500 people who work for HMV. Clearly this is a very worrying time for them and their families," he said.
He added that they would do "whatever we can in conjunction with Deloitte to safeguard jobs where possible".
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HMV's 239 outlets will remain open while Deloitte attempts to find a buyer for some or all of the business, although it is likely that there will be widespread store closures as a result of the collapse. The news comes after the recent failures at Jessops and Comet.
The company's administration also means that vouchers and gift cards, many of which were given as Christmas presents, will be worthless.
Concerns about the future of the firm were raised last week, when it announced a month-long, 25 per cent off sale across its stores.
Squeezed by internet retailers and supermarkets, whose scale has enabled them to offer CDs and DVDs at cheaper prices, HMV's boss Trevor Moore warned before Christmas that the entertainment group was in trouble.
The firm has struggled with the move to buying films and music online. In recent months, it has trialled the sale of more consumer electronics in its stores, but to little avail.
Late last week, HMV asked its suppliers, which include music labels, game makers and film companies, for around £300m in additional financing to pay off its bank debt, and fund an overhaul of the company’s business model.
Fresh fears over future
But the proposal was turned down, raising fresh fears that the company would be forced into administration.
The HMV administration comes after the collapse of camera retailer Jessops last week, with the loss of 1,400 jobs. It announced on Friday it would close all of its UK stores, making a gloomy start to retail in 2013.
Any closure of HMV could strike a damaging blow to the UK retail market for video games, CDs and DVDs.
According to Verdict, HMV’s share of the combined music and video market, defined as physical and downloaded products bought on and offline, was 22.2 per cent in 2012.
HMV, founded in 1921 selling gramophones in London, has 239 stores in the UK and Ireland, including nine Fopp stores, all of which are affected by the administration.
HMV's market share and sales peaked in 2009, after the demise of Woolworths. Its market share has remained steady, despite falling sales as well as the collapse of rivals like Zavvi.
HMV's woes follow a turbulent 2012 for the UK high street, which saw the demise of firms including Comet, JJB Sports, Clinton Cards, Game Group, Peacocks and Blacks Leisure.