SINGAPORE: HMV music retail chain is set to shut down its stores in Hong Kong after 25 years, after the rise of streaming services and digital products drowned out its music.
HMV Digital China Group, the owner of HMV Retail, announced on Tuesday (Dec 18) that it is voluntary winding up the unit.
"HMV Retail is being placed into creditors’ voluntary winding up after taking into consideration, amongst others, its insolvency and the various defaults in payments of the lawsuits previously received," HMV Digital said in a Hong Kong stock exchange filing.
HMV Digital's shares fell 21.4 per cent after the announcement.
"CRUSHING FORCE OF THE WHEEL OF HISTORY"
The company cited the changing music industry and the increasing digitisation of the industry as having adversely affected its retail chain business.
Said HMV Digital: "The HMV Retail business in Hong Kong has faced numerous struggles and ups and downs, witnessing the rise of the record industry and the heyday of CD, VCD and DVD home entertainment systems, but as time changes, the global development of information and economic climate have also changed, and although there were many reforms on the mode of sales for audio visual products, they were no match against the digital tide."
In addition, HMV Retail in Hong Kong experienced "drastic changes" during the past few months, it said.
The emergence of Apple's AirPods - wireless earphones introduced by the tech giant a few years ago - resulted in a "significant drop" for HMV's earphones, said the company.
This, coupled with a saturated market for speakers, lack of improvement in traditional audio-visual sales and a "general change in the economic environment" led to a rapid decline in sales, it said.
"Suffering from operational difficulties, HMV Retail was unable to escape from the crushing force of the wheel of history," it said.
CLOSURES IN OTHER COUNTRIES
HMV's closure in Hong Kong comes five years after HMV Retail’s head office in the United Kingdom filed for bankruptcy.
HMV shut down all 102 of its stores in Canada last year due to the impact of online streaming media, signifying the "hardship in operating physical stores".
In Singapore, the last HMV outlet in Marina Square was shuttered in September 2015.
"As HMV Retail stores in Hong Kong faces the same shock in recent months, it became an inevitable decision for us to wind up the business," it said.
"HMV Retail has not been generating sufficient revenue to cover its own operating expenses and there is no reasonable prospect of making any significant improvement on its financial performance or operation in the foreseeable future."
During the period of liquidation, the liquidator will continually seek new investors to recommence HMV Retail's operations.