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HMV, vote of confidence from Russian billionaire, new trademark for possible fashionable future

By | Published on Thursday 11 November 2010

The HMV Group saw a little rise in its share price yesterday after it was revealed a Russian billionaire by the name of Alexander Mamut had increased his shareholding in the company to 3% at a reported cost of £5 million.

Although analysts pointed out that this size of investment wasn’t so significant for someone as wealthy as Mamut, others admitted the share buy was a vote of confidence in the music and entertainment firm, which has seen its share price slump this year amid concerns about the future of entertainment retail on the high street.

HMV, of course, has been busy diversifying, expanding its product ranges in store, enhancing its online offering, and moving into live music, artist management and brand partnerships through its acquisition of the MAMA Group. It makes the wider HMV Group a very interesting company, though many in the City still struggle to see beyond its high street retail core.

Some City commentators have speculated that Mamut, who has been investing in digital companies in recent years, most notably buying blogging firm LiveJournal in 2007, reckons HMV’s digital strategy, including its 50% stake in 7Digital, is stronger than many other investment types realise and therefore a share purchase now – while the price is relatively low – is a shrewd move.

According to City AM, Nick Bubb of Arden Partners said in a note yesterday: “An investment of five million pounds is chicken-feed to Mamut at this stage, but his ultimate intentions are unclear. [But perhaps he reckons] HMV’s online investments are under-recognised and underpin the value of the business at this ultra-low level”.

Or perhaps he just likes trendy t-shirts. HMV admitted earlier this week that it is considering launching its own fashion brand. The company extended the clothing departments in its stores in September, of course, beyond the traditional band t-shirts and are now selling other music-related fashion lines.

An HMV spokesman confirmed this week that the company has registered the trademark ‘363’ – the address of their original Oxford Street store – for possibly future use on clothing. Though the spokesman stressed such plans are, so far, very provisional.