HMV Bankruptcy: Music Retail Chain Files For Protection in Britain

Posted on Jan 15th 2013 11:35AM by Jason MacNeil
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Peter Macdiarmid, Getty

Music retail outlet HMV has officially gone into administration (the British equivalent of bankruptcy protection) today, leaving the future of the company as well as thousands of jobs in doubt.

According to The Guardian the retail chain called in administrators due to diminishing sales and a poor period during the holiday season which accounts for a large percentage of its annual sales.

HMV -- the acronym for His Master's Voice -- had been battling debts for two years with banks revising terms of loans and even music labels such as Warner Brothers, EMI, Disney and Universal trying to improve the retailer's position. But on Monday night those companies refused to provide additional funding to HMV, which prompted the administration move.

The Telegraph reports the company, which started back in 1921 with a location on London's Oxford Street, and its stores will remain open during this process.

Though the growth in online downloading left the store struggling to to sell CDs and DVDs the stores still account for 38 per cent of the "physical" music market in Britain. In the U.K. alone HMV employs some 4,500 people.

Although closely associated with EMI in the '60s, EMI spun off the business in 1998. HMV was purchased by Advent International but EMI maintained a 45 per cent share in the business. The Telegraph says record labels might end up purchasing HMV -- possibly Universal, which recently purchased EMI -- to keep it alive. But nothing has been confirmed.

HMV can also lay claim to music history. The Telegraph revisited the story today regarding The Beatles and the role HMV played in their early career. After being rejected by Decca Records following a 15-track demo, the band's then-manager Brian Epstein drove to the London outlet with the demo in hand.

The demo impressed the shop engineer and eventually reached the ears of George Martin, then a Parlophone executive. On Feb. 13, 1962 Martin heard the demos and set up a meeting for later that year with a contract created before Martin even met the band. That September the band went on to record "Love Me Do" at Abbey Road, the band's first single.

Watch HMV Employees Talking About HMV