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HMV Canada goes into receivership
By Chris Cooke | Published on Monday 30 January 2017
The HMV Canada business was formally put into receivership in the Ontario Superior Court on Friday. Some of the company’s 100+ stores will remain open for a few months in order to liquidate stock, though – according to legal documents obtained by the CBC – all operations must cease by 30 Apr. Many staff at HMV Canada’s head office were laid off as soon as the receivership was confirmed last week.
Following a tumultuous decade for music retail ending in the high profile collapse of HMV UK in early 2013, it’s felt like the last few years have been a little more stable for high street record sellers, in Britain at least.
Hilco managed to keep a streamlined network of HMV stores open over here. And many of those indie record shops still operating seemed to be doing alright, possibly benefiting from the government finally closing the VAT loophole previously enjoyed by online retailers, while the decline in CD sales slowed and the good old vinyl revival stomped on. A decade of closures also meant there was also a lot less competition.
Though with CD sales still slipping, the supermarkets tapping into the vinyl revival and artists getting ever more sophisticated with direct-to-fan, it feels like last year was yet another tricky one for at least some of those still trying to sell music on the high street. After a couple of years when we got to actually report on new record shops opening, in 2016 it was more common to hear about old favourites winding down.
So what does this all mean for HMV at large, which despite efforts to get its online business going again since the Hilco acquisition is still really mainly a high street affair? Well, in the UK it’s currently business as usual, but the collapse of HMV Canada follows the closure of the retailer’s Irish business last year.
Hilco acquired HMV Canada from the then faltering HMV plc in 2011. The Canadian business became a standalone entity, for a time dabbling in the streaming music space as the country’s record industry saw the same shift from physical to digital as elsewhere. HMV Canada then came into common ownership with HMV UK when Hilco rescued the British version of the business in 2013.
As with the UK company, HMV Canada tried to reduce its overheads by switching to smaller and cheaper retail units, while ramping up its vinyl and merchandise product lines. But that seemingly wasn’t enough to rescue the business, and efforts to get more support from the music and movie industries didn’t pay off either. HMV Canada collapses owing a reported $56 million to suppliers, which include the labels, while also owing a significant sum to Hilco itself.
Court papers filed on Friday said that “the company and major suppliers were unable to reach an agreement, on mutually acceptable terms to sustain HMV’s operations and support a recovery”. Gordon Brothers Canada ULC and Merchant Retail Solutions ULC were appointed by the judge overseeing the receivership to sell off the firm’s remaining assets.
