HMV, one of the U.K.'s largest extant entertainment retailers, announced today that it is entering administration, the country's rough equivalent of filing for bankruptcy.
The company "has been unable to reach a position where it feels able to continue to trade outside of insolvency protection," it said in a statement obtained by The Telegraph. The retail giant will now be run by financial services firm Deloitte, which will attempt to secure a buyer for the company as stores remain open for business; trading of HMV shares on the London Stock Exchange has been suspended.
According to the Financial Times, HMV had been seeking £300 million ($482.6 million) in additional financing from its suppliers — which purchased a 5 percent stake in the company in early 2012 — to pay off its debt and revamp its business strategy, but its requests were denied. HMV had announced Dec. 13 that it anticipated it "would not comply with its banking covenants" at the end of this month.
The administration announcement makes HMV the latest U.K. retailer to succumb to the physical-to-digital shift in consumers' media purchasing habits. Online retailer Play.com announced last week that as of March, it will stop selling products itself and will become an online marketplace.
HMV operates about 235 stores, most of which are located in the U.K. and Ireland, and employs approximately 4,350 people. The company opened its first store in 1921 in London; today, it sells products such as music on CD and vinyl, DVDs and Blu-rays, video games and accessories like headphones. HMV accounts for 27 percent of DVD sales and 38 percent of physical music sales in the U.K., according to The Guardian. The retail chain's market share and sales have declined following a peak in 2009.
"For the sake of HMV's employees, we hope a way can be found to keep the business going," said Chuka Umunna, Shadow Business Secretary for the U.K.'s Labour Party and Member of Parliament. "The demise of HMV — a national institution — would be a sad loss for British retail."