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Hilco’s HMV deal announced, some closed stores to reopen

By | Published on Friday 5 April 2013

HMV

Hilco has bought HMV UK, it has been announced, and will now take the streamlined company out of administration. As much previously reported, when HMV finally fell into administration in January, Hilco, the restructuring firm that already owns HMV Canada, quickly bought up the retail company’s bank debts and then opened talks with administrators Deloitte about acquiring the HMV UK business.

And while a plethora of other bidders came forward to acquire the leases on certain key HMV stores, it’s not thought anyone else was seriously interested in taking on the HMV UK company as a going concern (despite rumours ASDA was considering it). So much so, confirmation of Hilco’s acquisition has been expected for a number of weeks now.

The deal, thought to be worth £50 million, will save 140 of the retail firm’s shops, including 132 HMV-branded stores and the eight shop Fopp chain. It means that the HMV network emerging from administration is twice as big as many people expected, though about 60% of what it was last December.

Whether Hilco and the management team it puts in place can build a commercially viable entertainment retail business in the long-term remains to be seen. The removal of loss-making stores and weighty bank debts will certainly provide some breathing space, but it won’t overcome the fact that CD sales continue to slide across the board, and the gadgets business that the previous HMV management put their hopes on also faces stiff competition from online operators with much lower overheads.

But, in the short term at least, the all-new HMV can count on the continued support of the record and DVD industries, which are thought to have already agreed terms of business with the firm’s incoming new owners.

Hilco’s 140 store plan will save about 2500 jobs, and will see several HMV stores already closed (or in the process of closing) being saved too. Which explains why a number of regional newspapers have been declaring their local HMV stores “saved” in recent weeks, and why posters have appeared in the windows of some closing stores declaring “We’re here to stay!”

Under the headline, that poster continues: “We’re very pleased to announce that thanks to the support of our valued customers and landlord, this store is staying open. Normal service will resume shortly – please bear with us while we refill the store with the music, film, games and tech you love”.

According to local news reports, stores in Freshney Place in Grimsby, Princes Street in Edinburgh, Royal Priors in Leamington Spa, Ropewalk Shopping Centre in Nuneaton, Chapel Street in Southport, the Cleveland Centre in Middlesbrough, King’s Walk in Gloucester, High Street in Newport on the Isle Of Wight and Commercial Street in Newport (the mainland Newport) will remain open for the foreseeable future.

The Irish Independent has also reported that Hilco’s Ireland-based division is hoping to reopen some Irish HMV stores, all of which were closed when the company went into administration. Dublin’s Grafton Street store is apparently first on the list to return.



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