Features
HMV Fights Back
HMV chief exec Simon Fox has a couple of announcements up his sleeve that may help convince the market that his company is through the bad times.
He can preface the news that the full-year results to be announced June 30 will show HMV’s made a profit of about $45.5 million by revealing it’s hived off its 121-store Canadian business to Hilco-owned Valco Capital Partners for an estimated $8 million.
The Daily Telegaph says HMV’s suppliers have already been told that the loss-making Canadian business has gone to the UK-based restructuring firm, which briefly owned Borders in 2009.
The news comes hot on the heels of HMV selling its Waterstone’s book chain for $85 million. The deals helped sway bankers including Lloyds Bank and Royal Bank Of Scotland to provide HMV with a new $362 million refinancing deal.
With its short-term future assured, Fox has made space to try to turn the company around in the longer term.
The troubled music retailer-turned-360-degree music company is still exposed in a market where Official Charts Company figures show the number of digital albums sold in 2011 has reached the 10 million mark in record time.
Last year, which also broke records, saw only 7.1 million sales by the end of June.
It’s not good news for HMV shareholders as physical sales of CDs and DVDs are still the company’s core business.
It’s likely the company’s five stores in Hong Kong and two in Singapore may also be put on the block, but now Fox must show the company can make money out of its live music venues, festivals, ticketing, and by selling music technology.
There are mixed opinions as to whether it can do so to such good effect that it can service the high interest and fees attached to the new $362 million deal.