Belfast Telegraph

Sunday 13 July 2014

Rents and web blamed for HMV crash

HMV Ireland was put into receivership last month

High rents as well as online competition have been blamed for the collapse of HMV in Ireland.

Last-ditch attempts to rescue the music and entertainment retailer failed after administrators could not find a buyer.

Sixteen stores which had been shut down last month will not reopen and 300 staff who were temporarily laid off will be made redundant.

Receiver David Carson of Deloitte, who was charged with trying to save the business, said he was unable to find investors who would take over the well-known chain as a going concern.

"The marketplace is very difficult given competition from web-based retailers and digital downloads, compounded by a number of other factors including high levels of rent," he said.

"All stores were loss-making and it was not possible to attract a purchaser."

Employees will only be offered the minimum statutory redundancy payment - generally two weeks' pay for every year of service plus an extra week. A spokesman for the receiver also confirmed that any outstanding pre-paid gift vouchers for HMV would not be honoured.

The Irish division of the high street retailer was put into receivership on January 16.

The closure of the stores at the time - including HMV's flagship in Dublin's Grafton Street, Patrick Street in Cork, the Crescent Centre in Limerick and Johnston Court in Sligo - was initially intended as a temporary measure.

It is understood some landlords had made conditional and tentative agreements to reduce rents on some premises as part of a rescue plan. However, the savings offered were not enough given the depth of the chain's financial difficulties.

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