HMV will enter into administration on Tuesday, the company has announced.
This comes after the firm's suppliers, including Universal Music, EMI, Warner Brothers and Disney, apparently refused to provide further financing needed for the retailer to continue trading.
The company has called in Deloitte as administrators after succumbing to another crucial Christmas of poor sales resulting in HMV's inability to secure terms on various loans. Some 4500 jobs and over 200 stores are at risk.
Here's HMV's official statement:
On 13 December 2012, the Company announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.
Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, 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 and certain of its subsidiaries with immediate effect.
The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.
It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.
The Company's ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect.
On Monday afternoon it was believed that the high street retailer was holding a key board meeting to determine its future.
The news follows the recent demise of UK electronics retailer Comet, once a 235-store chain, which closed its doors in December 2012 after being tipped for administration in early November.