(MENAFN - AFP) For generations of British music fans, HMV stores were the perfect place to while away a Saturday afternoon, browsing through racks of albums, new singles and the latest bargain.
But now the group, the last major music and DVD specialist left on the British high street, has followed rivals into administration as it succumbs to the reality of the new Internet age and a shift to digital formats.
HMV will continue trading while a buyer is sought, but the future looks bleak for the more than 4,300 staff in 239 stores across Britain and Ireland.
The company has been hammered for years on price and range by online rivals such as iTunes and Amazon, as well as the supermarkets, coupled with a sharp decline in physical sales coinciding with a boom in digital entertainment.
It has huge debts and in December it reported sales were down 13.5 percent, prompting the chain to warn that it could breach crucial banking agreements in January.
The share price crashed, leaving the company valued on Monday at just over 5 million (six million euros, 8.0 million) -- a far cry from the almost 850 million proposed in a 2006 private takeover offer.
HMV is the lone survivor of a desperate decade for the industry that has felled rivals Our Price, Tower Records, Virgin Music and Zavvi.
It had sought to innovate, introducing a click and collect service, free open wi-fi in shops and 'myhmv', a personalised web-based service that connects to customers' mobile phones when they enter a store and offers them tailored deals.
But critics say the company was too slow to respond to the Internet.
Kate Calvert, an analyst at Seymour Pierce brokers, said this week's developments were "inevitable, with the declining footfall on the high street and the nature of the fact that their product categories are disappearing".
"HMV isn't a brand that the youth of today think of," she told AFP.
-- Attempt to focus on audio equipment --
The first HMV opened on London's Oxford Street in 1921 under the ownership of the Gramophone Company, which endowed it with its iconic trademark, the image of a dog listening to a gramophone -- His Master's Voice.
It became part of music history in 1962 when Brian Epstein cut a demo for The Beatles in the shop studio, which led to the Fab Four signing with EMI, the record label which owned HMV until 1996.
The group expanded rapidly in the 1980s, opening HMV branches in North America, Australia, Japan, the United States, Hong Kong and Singapore, buying the Waterstones book chain and moving into the live music business.
But the overseas stores were subsequently sold, except for eight in Hong Kong and Singapore, as were the book and live music units, leaving the company dependent on its core market -- music, visual and games, as well as technology.
HMV sought to reduce its reliance on music given the steady decline in CD sales, which fell by about 15 percent last year, while DVD sales fell by a slightly smaller amount, according to industry figures.
Digital sales of music, video and games grew in 2011 by 11 percent.
HMV stores cleared space for technology such as headphones, speakers, mp3 players and tablets, which made up a quarter of its sales, and were viewed as a major growth area for the company.
But one of the main reasons HMV has survived this long is the support of its core suppliers, the film studios and record labels.
They reportedly provided 40 million to the group last year, as well as taking an equity share and providing HMV stores with greater access to back catalogues and an option to buy stock on consignment.
Andy Heath, a record label boss and chairman of industry body UK Music, acknowledged that HMV had been "wounded very badly" by the Internet and said they struggled to respond because they were simply too big.
He suggested that going into administration "gives it an opportunity for a very substantial rebirth".
Kim Bayley, the head of industry body the Entertainment Retailers Association, also said that while the latest development was "very sad", all was not lost.
"We remain very positive that there's a chance for a buyer out there, and that this is a viable business," she told AFP.
She cited HMV figures showing 170 million visited their stores last year, adding that three-quarters of the entertainment market was still physical, and HMV has a third of that market.
"Some people have migrated online but a lot of people don't want that, they like shopping," she said.
However, Calvert is not convinced. If someone wanted to buy it, "they would have done it already", she said.<