Music retailer HMV has become the first high street casualty after Christmas as the appointment of administrators was confirmed.
The business will continue to trade while options are explored, including a potential sale, KPMG said.
It is the second time HMV has collapsed in recent years, having filed for administration in 2013, after which it was acquired by its current owner, Hilco.
The company operates from nearly 130 stores across the UK – including nine Fopp stores – and employs 2,000 permanent staff.
The appointment of administrators was confirmed following a hearing before a High Court judge on Friday evening.
The company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industryWill Wright, KPMG
Will Wright, partner at KPMG and joint administrator, said: “Whilst we understand that it has continued to outperform the overall market decline in physical music and visual sales, as well as growing a profitable ecommerce business, the company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industry.
“This has been in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures.
“Over the coming weeks, we will endeavour to continue to operate all stores as a going concern while we assess options for the business, including a possible sale.
“Customers with gift cards are advised that the cards will be honoured as usual, while the business continues to trade.”
Speaking on Friday, Paul McGowan, executive chairman of HMV and Hilco, said: “During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, whilst HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.
“HMV has clearly not been insulated from the general malaise of the UK high street and has suffered the same challenges with business rates and other government-centric policies which have led to increased fixed costs in the business.
“Business rates alone represent an annual cost to HMV in excess of £15 million. Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market.”
The failure of another major high street name before the year is up caps a miserable 12 months for the retail sector.
The likes of Poundworld, Toys’R’Us and Maplin have all gone bust this year, while heavyweights Marks & Spencer and Debenhams have announced plans to shutter hundreds of stores.
Several others – including Superdry, Carpetright and Card Factory – have all issued profit warnings.
High street retailers have been slashing prices after brutal trading in November and early December failed to lure shoppers to stores.
Traditional retailers have been battling the rise of online shopping, higher costs and low consumer confidence as shoppers rein in spending amid Brexit uncertainty.