Show Hide image

HMV goes into adminstration

4,000 jobs at risk.

The British music retailer HMV Group, which operates 230 stores, has failed to secure an additional financing of £300m from suppliers including music labels, game-makers and film companies to pay its bank debt.

The move, which is seen as another blow to the British retail market, puts 4,000 jobs at risk.

The company tried its best to strike a deal with creditors to prevent administration. Meanwhile, HMV has hired Deloitte as administrator to identify a purchaser for the company.

The company, in a statement, said: “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.”

Neil Saunders, managing director of retail consultancy Conlumino, told the Financial Times: “It has been a long time coming, but everyone has known that the writing was on the wall since the day someone first downloaded a digital song.”

“People will be very sad to see it go because it is a very emotionally connected brand, which most of us have used and have a lot of resonance with. But the truth is it is just not a part of our purchasing habits as much as it used to be,” Saunders added.

HMV, which closed Woolworths business in 2008, suffered by poor sales during Christmas and holiday season apart from the migration to purchasing of music and films online.

Chuka Umunna MP, Labour’s shadow business secretary, told the Financial Times: “HMV is a national institution that has been a feature of our high streets for over 90 years so this news is deeply worrying. For the sake of HMV’s employees, we hope a way can be found to keep the business going. The demise of HMV – a national institution – would be a sad loss for British retail.”

Last week, the British photographic retailer Jessops cut 1,400 jobs citing poor business performance. In 2012, JJB Sports, Clinton Cards, Game Group, Peacocks and Blacks Leisure saw failures due to weak sales.

Getty Images.
Show Hide image

Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.