Deal saves thousands of HMV jobs
Published 04/04/2013 | 23:51
Around 2,500 jobs at entertainment retailer HMV were saved after restructuring firm Hilco bought 141 stores, including 25 previously slated for closure.
Hilco, which already owns HMV Canada, has bought the high street chain from administrator Deloitte, reportedly paying £50 million for the DVD and CD retailer.
The company, which is also in talks about re-establishing the chain in Ireland, has negotiated revised terms with landlords and the key suppliers to the business.
HMV had 223 stores across the UK, employing 4,123 staff, when weak consumer spending and intense competition from the internet and supermarkets forced it into administration in January. Shortly after being appointed, Deloitte announced 66 stores closures with 900 job cuts.
HMV, known for its Nipper the dog logo, was one the high street's biggest casualties and followed the failures of camera chain Jessops and electricals retailer Comet.
Hilco bought HMV's £176 million of debt for a reported £40 million, putting it pole position to acquire the group. Hilco chief executive Paul McGowan said the group spent weeks discussing fresh terms with landlords and suppliers, which all supported its plans to keep the chain on the high street. The long-awaited deal includes nine Fopp stores.
Hilco plans to replicate some of the success it has had with HMV in Canada, which it bought almost two years ago and is now "trading strongly".
Mr McGowan said: "The structural differences in the markets and the higher level of competition in the UK will prove additional challenges for the UK business but we believe it has a successful future ahead of it."
The HMV UK business will be led by a team working alongside existing management. Ian Topping, former chief executive of Harveys and Cargo furniture stores group Steinhoff, will lead the Hilco team. Mr McGowan will be chairman of HMV.
Hilco will reverse plans to sell tablets and other devices in stores and "reclaim the space for an enhanced music and visual range". Mr Topping said: "The reaction of the British public to the administration of HMV shows a strong desire for the business to continue to trade and we hope to play a constructive part in delivering that."