HMV rescued by US firm
Troubled British music retailer HMV has been rescued by US restructuring fund Hilco, which says it is determined to keep the chain open on the high street despite fierce competition from online rivals.
The deal to acquire all 141 of HMV’s stores could save 2500 jobs at what has been an iconic name in the British retail sector for more than 90 years.
HMV had more than 400 outlets around the world at its peak but has steadily lost ground to online competitors.
The growth of digital music eroded its traditional market, while a series of ill-fated relaunches failed to turn the chain around.
It finally collapsed in January. No figure for the Hilco rescue was officially announced, but reports said the deal was worth around STG50 million ($A73.5 million).
Britain’s last surviving national music retail chain, HMV has been plagued by heavy debts, fierce competition from Amazon, and supermarkets, whose vast scale enabled them to offer CDs and DVDs at cheaper prices.
The deal with Hilco includes all 132 HMV shops and nine branches of the Fopp chain.
Hilco took over HMV’s Canadian business two years ago.
Paul McGowan, CEO, said the company hoped to “replicate some of the success we have had in the Canadian market”, where HMV is now “trading strongly”.
McGowan said Hilco spent weeks discussing fresh terms with landlords and suppliers, who all supported its plans to keep the chain’s shops open on the high street.
Another Hilco executive, Ian Topping, said it would reverse plans to sell tablets and other devices in stores and “reclaim the space for an enhanced music and visual range”.
HMV is one of a number of British retailers that have suffered since the economy began to slow in 2007.
Electrical chain Comet, bookshop Borders, general retailer Woolworths and music chains Virgin and Tower have all gone to the wall in recent years. AFP
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