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HMV in talks to sell 7Digital stake

By | Published on Monday 17 October 2011


HMV is in talks to sell some or all or its stake in 7Digital, according to Sky News City Editor Mark Kleinman. It bought 50% of the download firm, which operates its own 7Digital-branded MP3 store and powers many others, in 2009 for £7.7 million.

The flagging entertainment retailer, whose previous efforts in the digital music space had been pretty lacklustre, saw the acquisition as a way to fast-track its digital ambitions, and HMV’s own download platform subsequently relaunched using 7Digital technology.

At the time of the purchase HMV indicated that it might look to take complete ownership of the digital company at the end of 2011 or 2013, but it seems that the opposite may now happen, with the struggling retail firm instead selling its half. According to Sky, HMV bosses are in talks with various technology companies interested in buying the stake.

HMV bought 7Digital during a period of expansion and diversification, when CEO Simon Fox was keen to expand his company off the high street, and during which time various new ventures and partnerships in the music and wider entertainment space were explored.

Of course in the last year, when the loans run up by that diversification started to cause problems, Fox has been forced to streamline the business, though so far has done so by selling off some of HMV’s traditional retail operations, Waterstones in the UK and the HMV stores in Canada.

That said, Fox’s current priority regarding further diversification is on the high street, expanding the technology departments at HMV’s existing stores, so if further streamlining is required selling off one of its newer acquisitions might be the logical option.