The HMV name will survive to trade online and on the high street after a rescue was mounted by restructuring specialist Hilco.
Administrator Deloitte confirmed today that Hilco UK had bought the stricken multichannel retailer’s retail business out of administration. The move to buy 141 stores, HMV’s head office, and distribution functions, will save 2,643 jobs.
Nick Edwards, joint administrator, said: “We are delighted to have completed the sale of HMV’s UK retail business to Hilco UK. The sale of the restructured portfolio secures the employment of 2,643 staff, saves one of the world’s most iconic retail brands and provides a solid financial footing on which the business can be taken forward. We wish the Hilco UK and HMV teams every success with the business. I would like to thank all those stakeholders that have worked with us during the administration, but in particular the staff, suppliers and landlords for their support in making this deal possible.”
When Deloitte was appointed, HMV operated 222 stores, of which 81 have closed.
The news was reported on HMV’s website today. In a post from Team HMV, the company said: “Great news. We’re officially out of administration and under new ownership. The whole team’s working hard behind the scenes to bring you the new and improved hmv. A new website and digital services, a rebooted Pure rewards scheme, and a fresh approach to our stores are all in the works.
Peter Saville, partner at advisory and restructuring firm Zolfo Cooper, said the news was “really positive” for the chain and the wider UK retail sector. “Hilco understands the market well and is a seasoned high street veteran,” he said. “The news that HMV is to continue trading will also be welcomed by suppliers as an over-reliance on online channels may be uncomfortable.
“The test now is with the consumer. Following the public’s outcry at the demise of HMV, consumers need to start shopping in the stores again in order to secure its future on Britain’s high streets.”
But Jon Copestake, of The Economist Intelligence Unit, said: “The purchase of 141 HMV stores by Hilco has mixed implications. On the one hand Hilco has a good track record with the HMV brand after a successful and well managed turnaround of the Canadian business. However, in the UK Hilco has been accused of asset stripping at Woolworths, Allied Carpets, Habitat and Borders at the expense of thousands of jobs.
“The fact that Hilco are backed by major music labels and film studios, who want a viable alternative to Amazon and Apple, indicates that HMV will remain on the high street. But the deal only accounts for about 60% of the stores and job losses are inevitable for a firm that simply had too many outlets to sustain diminishing sales.”
Our view: Last week we reported on the survival of Jessops, and this week it’s HMV in the spotlight. Both, however, survive in a much slimmed-down form. Once again, smaller store numbers combined with online seem pivotal to giving this retailer a future.
