HMV stores to close by April 30, 2017.
An Ontario Superior Court of Justice approved an application filed by HUK 10 Ltd., a subsidiary of the British restructuring firm Hilco UK that bought HMV in 2011, to place HMV Canada Inc. into receivership.
HMV stores are to cease operations by Apr. 30, according to sale guidelines issued by the court.
A sworn affidavit submitted by HUK 10 director Christopher Emmott said HMV was profitable from 2011 to 2013, but has had negative earnings since. In 2012, HMV’s revenue was about $266 million, but, by 2016, this had fallen to $193 million, a trend that’s “expected to continue as more customers move to online consumptions of media.”
To continue operations, HMV would require an “immediate cash injection” of $2 million and then $5 million of additional cash injections every year after that, the affidavit added.
“These financial difficulties, combined with the further decrease in (HMV’s) sales expected over the coming years, means the current situation is not sustainable,” the affidavit said.
“HUK 10 is not prepared to provide further financial support to (HMV) under the current circumstances.”
The application noted that HMV’s inventory is “significantly depleted with no viable alternative support arrange to replenish its stock.”
Remaining HMV stores will maintain regular opening hours until their final vacate dates, court sale guidelines said, and may advertise with “store-closing,” “everything-on-sale” and “everything-must-go” signs.
HMV currently operates 102 stores in Canada and employs about 1,340 people, most of them at its retail locations.