In a massive blow to concrete and mortar business of the music industry, declining sales have forced HMV Canada to go down the road of receivership and it could likely be closing over 100 stores this year across the country.
According to reports in the local media, a major lender of HMV Canada has likely asked the Ontario Superior Court on Friday (January 27) the music CD retailing chain into receivership and this could likely force the company to close its all Canadian stores.
With proliferation of online and cloud music industry, brick and mortar retail stores were witnessing dwindling sales. HMV Canada was sold to private equity arm of Hilco International Holdings LLC back in 2011 and this was an indication that the company may be not faring well and closure could be on the cards. Though the company did expand its retail offerings by including DVDs, music accessories and T-shirts, these measures didn’t work well for the company it seems.
Reports indicate that HUK 10 hasn’t received any payments from HMV Canada since November 2014 and that’s something that had forced the company to take the route of the courts.
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.”
“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.”
In response the music chain has sought support from major labels and media groups to keep stores open through 2017. If that doesn’t happen, HMV Canada could be forced to close all of its more than 100 stores
HMV Canada hasn’t made any official statement about its future, but considering that there has been significant change in the music landscape, chances are that the company could be forced to do the worst.