HMV is to wind up its Hong Kong stores after entering liquidation today (18 December), the company blamed a 41% revenue fall on the previous year along with the “global development of information and economic climate”.
The retailer said the company’s insolvency was also to blame for the liquidation along with “various defaults in payments of the lawsuits previously received by HMV Retail”. As well as a decline in sales of physical copies of films, TV series and records, HMV said it had seen a drop in sales of its best-selling earphones due to the “emergence of AirPods”.
HMV Retail said it had not been “generating sufficient revenue” to cover its operating expenses, and added that there was “no reasonable prospect of making any significant improvement on its financial performance or operation in the foreseeable future”.
HMV Retail said in a statement: “The Board believes that it is in the best interests of the company and its shareholders as a whole to agree to the voluntary winding-up. The company may be able to reduce its investment losses as well as to allocate more resources and management efforts to develop its existing business.”
It was also noted that during the liquidation process, the “liquidator will continually seek new investors to re-commence business operation of HMV Retail”. HMV Digital shares fell by as much as 21% when trading on the Hong Kong Stock Exchange opened this morning.