Hilco Seals HMV Deal
Retail restructuring specialist Hilco has completed a £50 million deal for 141 HMV shops, hoping it can repeat the success it achieved in turning around the entertainment retailer’s Canadian business.
The deal includes several shops that had been earmarked for closure, including those in Edinburgh, Leamington, Nuneaton and Newport, and all nine shops in the Fopp chain.
It’s expected to save 2,500 jobs, although more than 1,000 have been lost with the closure of 81 outlets including Piccadilly Circus in London, Cambridge, and HMV’s major sites at London’s international airports.
Hilco, which has turned around HMV Canada since buying the operation from the British entertainment group in 2011, has been favourite to acquire HMV since acquiring its debt just days after the 92-year-old firm fell into administration.
“We have spent a number of weeks negotiating revised terms with landlords and the key suppliers to the business, all of whom have been supportive of our plans to maintain an entertainment retailer on the High Street,” said Hilco UK chief exec Paul McGowan, who will now become chairman of HMV.
“We hope to replicate some of the success we have had in the Canadian market.”
The deal involves HMV coming out of administration, which has been handled by Deloitte, and being backed by a new company incorporated in the UK.
Although piracy and online sales have brought HMV to its knees, The Guardian reckons the new, trimmed-down chain will put even more of an emphasis on music and music-related product.
This will include greater focus on the sale of T-shirts and other artist memorabilia as part of a “we are entertainment” revival plan.
McGowan and business partner Andrew Pepper have made millions from snapping up ailing retail and consumer businesses in the UK since it was set up in 2000.
It reportedly paid £40 million ($61.3m) in January for HMV’s £176 million ($270 million) debt.
McGowan, Pepper and Hilco’s U.S. parent company shared a £9.7 million ($14.9million) payout in 2011, on top of £22 million ($33.7million) the year before.