HMV Canada to Close All Stores Nationwide

Published Jan 27, 2017

Amongst sliding physical sales and the rise of digital music streaming, HMV Canada has been faced with some hard times in recent years, and they may soon be getting much worse. 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.Thereports 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," thereports.The continuous shift away from purchasing compact discs in favour of streaming has hurt HMV Canada, with the court filings also revealing that the chain has been losing money since 2013. At the end of 2016, its annual sales dropped from $266 million to $193 million."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.Unfortunately, this is not the first time HMV Canada has faced major trouble, as more than 100 HMV locations across Canada were sold to the private equity arm of Hilco International Holdings LLC back in 2011.After being purchased by Hilco, HMV expanded beyond sales of music to offer DVDs, music accessories and T-shirts. Emmott added that HUK 10 has received no cash payments from HMV Canada since November 2014.HMV first opened in Canada in 1986.