Entertainment retailer HMV has suspended its shares and revealed it is set to call in Deloitte, as it filed a notice of intent to appoint an administrator.
HMV said: “The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the company with immediate effect.”
Deloitte partners Nick Edwards, Neville Kahn and Rob Harding are to be appointed as administrators. It is understood that they will continue to trade HMV while they seek a buyer for the business.”
It is thought restructuring firm Hilco could be interested in acquiring HMV. Hilco bought HMV Canada from the UK parent in 2011, and has overseen a better than expected Christmas at the north American entertainment specialist, which clocked up sales of $65.4m (£40.7m) against a target of $63.5m (£39.5m) over the festive period.
HMV warned before Christmas that it was in danger of breaching its banking covenants due to a worse than expected trading period.
The retailer’s directors met with lenders on January 8 to try and secure the future of the beleaguered entertainment chain. It is thought management had been considering hiring KPMG to conduct a CVA.
HMV had also last week asked its suppliers for about £300m in additional financing to help pay down its debt and fund an overhaul of the company’s business model, according to the Financial Times. However, the proposal was rejected.
The administration puts 4,000 jobs on the line.