He cited consumers switching from physical formats to streaming music and films along with increased business taxes and "the general malaise" of the British retail sector with contributing to the 97 year-old company's struggles.
Business property taxes alone cost the retailer over £15 million ($19 million) per year, said McGowan, while DVD sales across the whole market had slipped by 30 percent year-on-year.
According to Hilco, HMV accounted for 31 percent of all physical music sales in the U.K. in 2018 and 23 percent of all DVD and Blu-ray sales. However, industry projections of the market falling by 17 percent in 2019 led the company directors to call in the administrators.
"The company has enjoyed the support of the industry as it has tried to manage the transition from the physical market to the digital world of the future and in return has paid over £1.3 billion ($1.6 billion) to the principal music labels and movie studios in the U.K. alone over the last six years," said McGowan, thanking suppliers and partners for their support. "Unfortunately, the switch to digital has accelerated dramatically this year creating a void that we are no longer able to bridge," he stated.
Responding to the news that Britain's most famous music store had gone into administration for the second time in under a decade, the Entertainment Retailers Association CEO Kim Bayley warned that HMV is "not the only high street name facing tough decisions" following a tough fourth quarter for retailers.
"It is a fast-moving situation and it is too early to say how it will end," said Bayley. "What is clear is that following its first move into administration in 2013, HMV has enjoyed a remarkable turnaround and it is conceivable that this will happen again."
"The fact is the physical entertainment market is still worth up to £2 billion ($2.5 billion) a year so there is plenty of business there," continued Bayley. "For the sake of HMV's staff, customers and suppliers, we are very much hoping HMV can turn things around again."
In the meantime, consumer group Which is advising anyone with HMV gift vouchers "to spend it as soon as possible to avoid being left out of pocket."
HMV's struggles in the U.K. follow last year's closure of more than 100 brick-and-mortar HMV stores in Canada, also owned by restructuring specialist Hilco, although dozens of those stores have since been taken over by Ontario-based music retailer Sunrise Records.
Earlier this month, HMV Digital China Group - a separate company to Hilco - announced that it was to shutter all seven of its HMV stores in Hong Kong due to shifting consumer behaviours.