Tue, 8th Jan 2019
The vulture fund Hilco which owns HMV took out almost £50 million in fees during its five year period of ownership of the company, while HMV itself paid zero corporation tax.
The chain, which sells DVDs and music, confirmed on Friday that it had appointed KPMG as administrators. HMV has 125 stores, and employs 2,200 staff, the futures of which are still unconfirmed. If the stores do close then the cost of any statutory redundancy payments will be paid by taxpayers.
Paul McGowan, of Hilco Capital, which took over HMV in 2013, blamed the failure of the firm on a number of retail challenges, including a 30 percent fall in the popularity of DVDs and Blu-Rays thanks to the rise of video streaming. He also said that the company was struggling with a business rates bill which had cost them £15 million a year.
The music industry wants to see HMV continue on, since it is responsible for a lot of sales of physical media, and is the only remaining major vinyl and CD retailer on the UK’s high streets. Unfortunately, HMV has not yet managed to secure a deal with any music companies to support its position. Now, as administrators delve into the finances of the company, it has become clear that its position was far more challenging than it first appeared. The departure of former chief executive Ian Topping, who left HMV to take a position at Homebase, another Hilco company, is also noteworthy. His replacement, Neil Taylor, had just weeks to settle in before the festive trading period began.