Picking Up The Pieces Of HMV

Restructuring expert Hilco’s effort to keep the UK’s leading entertainment retailer on the high street is beginning to seem an expensive business.

The most it can hope to rescue from the ashes of HMV is a little more than 100 of what was once a 223-shop chain, with the remainder sold or left empty in order to make that possible.

Hilco has bought HMV’s debt, which was recently detailed in figures lodged at Companies House.

Bankers led by the Royal Bank of Scotland and Lloyds were owed £109 million, a further £53.3 million was due to suppliers, while the taxman’s in the line for his £20 million.

Apart from sorting out the debt, Hilco has reportedly offered winding up specialists Deloitte £50 million to buy the world-famous business out of administration.

The stripping-down process was gathering pace before the Companies House figures were known, as nearly a fortnight earlier Deloitte had announced it had shuttered another 37 outlets, confirming that at least half of the HMV stores will go.

Earlier in February, Deloitte had reckoned it would need to axe only 66 shops, with job-losses of about 1,000.

The 37 new closures, which include all four sites at London’s Heathrow Airport, mean the total number of job losses is now close to 1,500.

The flagship store in London’s Oxford Street is still open, although UK newspapers have speculated that Deloitte has received some interest in it.

“As part of our ongoing review of HMV’s financial position, we have undertaken a further review of the store portfolio and have identified an additional 37 stores for closure,” said Deloitte administrator Nick Edwards. “This step has been taken in order to enhance the prospects of the restructured business continuing as a going concern.”