Musical instrument retailer PMT falls into administration

Administrators have been appointed at S & T Audio Limited, which trades as PMT, one of the UK’s largest musical instrument retailers. The company has closed its 11 stores with immediate effect and the majority of its workforce have been made redundant.

PMT (Play Music Today) is headquartered in Liverpool and sold musical instruments and other associated musical equipment. The company had stores in Birmingham, Bristol, Cardiff, Leeds, Manchester, Newcastle, Northampton, Norwich, Nottingham, Oxford and Romford, as well as a warehouse facility in Liverpool, and also operated the online platform PMT Online.

In common with many other operators in the music retail sector, PMT has faced an array of headwinds over recent years that severely impacted its financial performance. The margins of top-branded equipment have shrunk amid competitive pricing and consumer confidence has plummeted as a result of the cost-of-living crisis, leading to falling sales for high-end products.

Additionally, PMT had also been hit by upward pressure on fixed costs, such as rent, business rates and staffing, which have impacted the broader retail sector. A number of insolvencies in the musical retail sector, meanwhile, have resulted in tightening credit terms, which further affected the company’s cashflow.

In accounts for the year to April 30 2024, the company reported turnover of £43 million, down from £47.1 million in 2023, and EBITDA of £182,489, down from £574,133. At the time, directors stated that the company had seen a “satisfactory year of trading”, but conceded that this occurred “amid an overall reduction in sector revenue” due to decreased consumer spending. The company also closed two “low contribution” stores during the year, contributing to the drop in revenue.

Faced with these challenges, PMT’s directors sought to explore the company’s available options, including a sale, refinance, investment and possible reorganisation of its store estate. However, a solvent option was ultimately not possible, resulting in the appointment of administrators.

Rich Harrison and Howard Smith from Interpath Advisory were appointed as joint administrators, with the company’s stores closing, 96 staff made redundant and 48 retained to assist in the administration.

Upon their appointment, however, the joint administrators concluded a sale of certain PMT assets, including stock to Gear4Music. The buyer said it had acquired stock with an estimated value of up to £2.4 million.

Interpath Advisory Managing Director and joint administrator Rick Harrison commented: "It’s been a tough few years for specialist music equipment retailers who have battled headwinds including rising costs, dwindling margins and the rising cost of living affecting consumer behaviour.”

"Unfortunately, despite the best efforts of the board, in the case of PMT, these challenges proved too difficult to overcome.”

"While we are pleased to have concluded a sale of the stock and other assets to Gear4music, our immediate priority is to provide support to those employees who have been made redundant, including supporting them with claims to the Redundancy Payments Service.”

In the company’s 2024 accounts, its fixed assets were valued at around £780,000 and current assets at £12.1 million, with net assets coming to £4.1 million.

Distressed retail assets could prove a valuable growth driver for buyers in the sector

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