Monday 18 March 2013, 11:13 | By Chris Cooke
HMV debts topped £347 million at collapse
HMV’s debts topped £347 million when the flagging entertainment retailer went into administration in January, the company having made losses in the first half of its financial year pretty much in line with its full twelve month losses the previous year.
And that despite optimistic chatter from HMV HQ as recently as last summer about the company going back into profit sometime soon. It seems the last ditch strategy of dedicating more floor-space to iPads and headphones to turn round the company’s fortunes was as daft as it sounded from the start.
Of the £347 million owing, £237 million was owed to unsecured creditors who, administrator Deloitte has confirmed, will go unpaid. It’s not yet clear who exactly that impacts, and whether any suppliers will be left exposed to dangerous levels by HMV’s collapse.
The Inland Revenue is likely to be amongst the biggest losers. A previously reported list of those private concerns owed money, which originated in an earlier ‘statement of affairs’ from Deloitte, listed accountants as amongst the biggest creditors, though the biggest debt in that list was £155,000 to KPMG.
The latest figures come from new documents prepared by Deloitte for HMV’s creditors, while previously unpublished company accounts to 27 Oct reveal the size of the retailer’s ongoing losses, having lost £37.3 million on sales of £286.6 million in the previous six months.
Of course that doesn’t include the all-important Christmas quarter, though the fact the company fell into administration shortly after the festive period presumably shows that the anticipated (or, at least, desperately wished for) recovery did not occur during those months.
The creditors; report reveals that there have been 33 expressions of interest to buy some or all of the HMV business, though the document says that, at the time of writing, no formal offers had been made for the company.
As much previously reported, restructuring specialist Hilco is expected to make a bid for a streamlined HMV business anytime now, it already owning HMV Canada and having acquired most of HMV UK’s bank debts. And with the big quarterly rent payment day just a week away, a deal could well be rushed through this week.
In related news, there were reports this weekend that four bidders had come forward specifically interested in the Fopp brand, the one-time independent record seller that went under in 2007, living on in a much streamlined form as an offshoot of the HMV Group.
Though, while smaller bidders have expressed an interest in the Fopp brand and its nine-store network, insiders say that Hilco is also interested in keeping that part of the HMV business as part of its wider bid for the company.