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HMV administrators negotiate with labels over stock, as 190 staff axed at HQ

By | Published on Friday 1 February 2013

HMV

HMV’s administrator Deloitte has been wrangling with the record labels and DVD distributors over the value of their in situ product, according to the Financial TimesAs previously reported, a year ago HMV renegotiated its terms with many of its suppliers, reducing the flagging retailer’s upfront costs when acquiring stock. Those deals are what arguably kept the retail firm in business in the run up to Christmas 2012.

In theory the suppliers have some security when offering HMV such favourable credit terms in that disks remain the property of the labels and DVD companies, meaning they can retrieve that stock if HMV should completely collapse. Though the logistics of retrieving that stock are quite complicated, given discs from all suppliers have been mixed up and are currently being stored in 230+ sites around the UK.

What would be easier – especially while it looks like an albeit streamlined HMV could emerge from the current administration – is for the retail company to buy all the stock it is currently sitting on at knock down prices. And in the main most suppliers agree, depending on the price administrators offer.

According to the FT, Deloitte’s first offer was 12p in the pound, something most suppliers predictably balked at. Though, say the FT’s sources, the price was negotiated upwards, and it is thought Universal and Warner Music have now reached a deal with the firm, which will also allow them to start supplying the retailer with new stock.

Elsewhere at HMV, a third of the retail firm’s back office staff were made redundant yesterday. That puts 190 employees from the retailer’s head office and distribution operation out of work. News of the sackings emerged via HMV’s consumer-facing official Twitter feed, because some of those being laid off still had access to it.

“We’re tweeting live from HR where we’re all being fired! Exciting!” the aggrieved employees tweeted, before criticising senior management, and then revealing “Just overheard our Marketing Director (he’s staying, folks) ask ‘How do I shut down Twitter?'” The rogue tweets stopped shortly afterwards and were deleted, though not before multiple amused bystanders had screengrabbed the tweets for online sharing.

Confirming the redundancies later, a rep for Deloitte said the cuts were “a necessary step in restructuring the business to enhance the prospects of securing its future as a going concern”.



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