The owner of Canadian record retailer Sunrise Records, Doug Putman, has rescued the HMV chain after it went into administration before Christmas. Putman saw off interest from Mike Ashley in the process.
Out of the 127 HMV stores, 100 will remain open, with 27 stores closing immediately with the loss of 455 jobs. A further 122 warehouse jobs will be lost. Though the deal does save nearly 1,500 jobs in total.
Sunrise Records previously acquired 70+ HMV store sites in Canada after the chain went bust, expanding the retailer's reach from five to 80+ stores.
Puman commented in a statement: “We are delighted to acquire the most iconic music and entertainment business in the UK and add nearly 1,500 employees to our growing team. By catering to music and entertainment lovers, we are incredibly excited about the opportunity to engage customers with a diverse range of physical format content, and replicate our success in Canada.
“We know the physical media business is here to stay and we greatly appreciate all the support from the suppliers, landlords, employees and most importantly our customers.”"
The news comes just weeks after it was reported Sports Direct CEO, Mike Ashley, was purportedly in talks to rescue HMV from administration. A move that would further engage him with the UK games industry, having purchased a sizeable stake in GAME last year.
Following unsuccessful talks with its suppliers, the music, DVD, and games specialist retailer HMV filed a notice at the end of December that it intended to appoint administrators for the second time in six years. The 98-year-old retailer went into administration back in January 2013, too, but was saved by Hilco - which already owed HMV Canada - after which the company moved away from expanding its consumer "experiences" and video game efforts, and instead doubled down on its position as a leading movie and music distributor. By April 2013, 141 stores were saved, protecting over 2,600 jobs, but it's now reported that Hilco is "highly unlikely" to recover the £60+ million the company has lent HMV in full.
Stating that the DVD sector had declined 30 per cent over the festive period, HMV chair Paul McGowan said at the time that while HMV "performed considerably better than that, such a deterioration in a key sector of the market is unsustainable".
"HMV has clearly not been insulated from the general malaise of the UK High Street and has suffered the same challenges with Business Rates and other government-centric policies which have led to increased fixed costs in the business," McGowan said at the time. "Business rates alone represent an annual cost to HMV in excess of £15m. Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market."
Thanks, The Guardian.