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New bidder emerges as decision on HMV’s future gets closer

By | Published on Monday 4 February 2019


A new possible bidder has emerged for HMV as administrator KPMG battles against the clock to find a buyer able and willing to rescue at least some of the UK’s final nationwide music retail chain. Joining the bidding is Canadian company Sunrise Records, which bought up a significant number of stores in its home country when HMV Canada went into administration two years ago.

HMV UK went into administration for a second time over the Christmas break, of course. Most recent owner Hilco, which bought the retailer out of administration back in 2013, said that a combination of high business rates, slumping DVD sales and tough trading conditions on the British high street had made running the retailer as a viable concern impossible.

KPMG has confirmed that it has received a number of bids to buy some or all of the HMV business. The most high profile bidder to date has been Mike Ashley of Sports Direct fame, who has acquired a number of other UK retailers on the brink in the last year, and who also has an existing stake in another entertainment retail business in the form of Game. It’s thought senior execs at HMV itself may also be attempting a management buy-out.

Now there is also the bid from Sunrise Records and its owner Doug Putman, reports of which first surfaced in Music Week over the weekend. Putman significantly expanded his Canadian business after the collapse of HMV Canada, which was also owned by Hilco. He presumably reckons that if he can make a success back home of stores on which Hilco had already given up, why not in the UK as well?

When negotiating to buy 70 of HMV’s old Canadian stores in 2017, Putman told reporters: “With HMV leaving, it leaves a big hole in the marketplace, so we just thought it was a good opportunity and the timing was right. So we are going to jump on it and do what we can. The reality is there is a large amount of customers that want that physical product that they can touch and hold and have”.

Bidders have seemingly been meeting with suppliers in the entertainment industry to discuss their respective plans, both informally and via sessions facilitated by KPMG. It is likely all bidders will be looking for cost savings to make the HMV network of stores viable. Though Hilco did that six years ago, so the question is are there further economies of scale to be achieved this time round, beyond reducing the number of stores?

Needless to say, employees of HMV urgently await some clarity of what the near future holds for the business. As do those labels and distributors owed money by the company, who need to understand what hit they may have to take from the latest collapse of the retail firm, while also wanting some assurance about the future so they can make decisions on whether or not to provide new stock to HMV’s stores.

All of which means KMPG needs to make a decision pretty damn quickly. It was thought there might be some news on a decision last week, but none was forthcoming. Some kind of update this week is now widely expected.