Due to the continued decline of CD sales and the increase in the usage of online music streaming services, HMV could be closing over 100 stores this year.

According to a report from the Globe and Mail, HMV Canada has been met with the news that an affiliated company, which is a major lender, is set to ask the Ontario Superior Court on Friday (January 27) to put the chain into receivership — a move that would effectively close the music chain’s more than 100 Canadian stores.

 

This news isn’t terribly shocking. Since the company was sold to the private equity arm of Hilco International Holdings LLC back in 2011 it’s sort of just seemed like the beginning of the end. After being purchased by Hilco, HMV expanded beyond sales of music to offer DVDs, music accessories and T-shirts. Sadly, it doesn’t seem like it was enough to save the struggling company.

The Globe & Mail reports that since HUK 10 has received no cash payments from HMV Canada since November 2014 and that’s not a good sign.

 

What sparked the news of the potential closure is the news that documents filed with the court this week reveal that the music chain sought support from major labels and media groups to keep stores open through 2017. In owing almost $40 million to affiliated firm HUK 10, the chain may be forced to close all of its more than 100 stores.

In an affidavit, HUK 10 director Christopher Emmott said that “the debtor has been unable to reach an agreement with the major suppliers on mutually beneficial terms that would allow the debtor to address its immediate cash flow needs,” the Globe reports.

 

“As a result of the constant and significant shift in the way media is consumed by customers, especially in North America, the debtor has seen a consistent year-over-year decrease in the sale of physical media,” Emmott said.

 

While HMV has made no official statement about the future of the company, it’s not looking good. We will update this story as more information becomes available.

 

H/T Exclaim

Filed under: Canada, hmv, hmv-closing