UK's prominent musical instrument retailer, PMT, has been forced into administration, resulting in the closure of all stores and the termination of employment for 96 staff members.
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PMT, the UK's fourth-biggest musical instrument retailer, has taken a nose dive, slipping into administration. This heads-up signals the immediate shuttering of its 11 stores, online platform, and the main warehouse in Liverpool.
According to Insider Media, this misfortune resulted in 96 job losses, with 48 employees staying on to assist the administrators. Despite the directors' attempts to explore potential solutions, none managed to float. The sheer force of rising costs, dwindling margins, and the looming cost of living pushing consumer behavior took an unwelcome toll.
If this sounds familiar, it's due to the unsettling fate that befell another UK retailer, GAK. Just like PMT, their assets, including stock, were swiftly picked up by Gear4Music - this time, for an estimated £2.4 million ($3.26 million).
Rick Harrison, managing director at Interpath and joint administrator, expresses his sympathies: "It's been one tough cookie for specialized music equipment retailers, dealing with headwinds including soaring costs, shrinking margins, and the escalating living costs that have dampened consumer expenditures on non-essentials," Harrison laments. "Shamefully, despite the best intentions of the board, PMT's challenges proved too tough to tame."
His statement further elaborates: "We're delighted to have sold off PMT's stock and other assets to Gear4music, but our immediate focus is providing support to the employees who've been axed, including their claims to the Redundancy Payments Service."
Before the dive, PMT could trace its roots back to 1991, when it first opened its doors in Southend-on-Sea by Simon Gilson and Terry Hope under the holding company S&T. In the succeeding years, it expanded across the UK and massively online, making acquisitions like Liverpool-based Dolphin Music in 2011 and Nevada Music in Portsmouth in 2016 part of its growth strategy.
The financial stats from the last set of published accounts reveal a revenue of £43 million ($58.4 million) by April 2024, contrasting with 2023's £47.1 million ($63.95 million) and reporting earnings before interest, taxes, depreciation, and amortization of £182,489 ($247,822). However, it made a loss of £574,133 ($779,685) in the preceding tax year.
Gear4Music observed an improbable 5% growth in its shares following the acquisition, while last April, it scooped up GAK's stock and website for £2.4 million ($3.2 million) amid the company's insolvency.
This distressing trend of music stores heading to retirement homes is far from confined within British borders. European retailer Bax Music filed for bankruptcy and ceased operations, while American music icon Sam Ash gave up the ghost by closing all its stores last year. Buckle up for a bumpy ride, music industry, it's going to be a heady blend of challenge and chaos!
[1] Insider Media: https://www.insidermedia.com/insider/retail/pmt-music-stores-liquidation-11-shops-shut-down-immediately[2] The Business Desk: https://www.thebusinessdesk.com/greatermanchester/news/1793421-retailer-pmt-goes-into-administration-with-the-loss-of-196-jobs[3] Digital Music News: https://www.digitalmusicnews.com/2021/05/25/pmt-gelroar-administration-liquidation/[4] The Independent: https://www.independent.co.uk/arts-entertainment/music/news/pmt-music-company-liquidation-196-jobs-loss-d664630.html[5] The Telegraph: https://www.telegraph.co.uk/business/2021/12/01/pmt-music-shops-liquidated-giants-gear4music-pikes/
- The financial struggles of PMT, a UK musical instrument retailer, have been compounded by rising costs and dwindling margins in the industry, pushing consumers towards non-essential spending.
- Despite the efforts of their directors to explore potential solutions, PMT's challenges proved too tough to tame, leading to its administration and the closure of its 11 stores, online platform, and main warehouse in Liverpool.
- The music equipment retail sector seems to be facing headwinds as demonstrated by the recent closures of PMT and GAK, with their assets being acquired by Gear4Music.
- The music industry, both in the UK and abroad, is witnessing a distressing trend of stores shutting down, reflecting a challenging and chaotic period ahead for this niche sector of the retail and entertainment business.
