HMV pledges sharper music focus as Hilco agrees rescue
Restructuring specialist Hilco said it had negotiated revised terms with landlords and major suppliers to the venerable retailer, famous for its Nipper the dog – His Master’s Voice – trademark.
Under the agreement, 141 stores will continue trading including 25 which had been earmarked for closure by administrators at Deloitte. Nine shops trading under the Fopp brand, which has Scottish roots, are included in the deal.
Scotland will have 13 HMV branches, including three in Edinburgh where all five outlets had been set to close.
Hilco confirmed the flagship Princes Street store would remain open along with shops in Leith’s Ocean Terminal shopping centre and Fort Kinnaird on the outskirts of the capital.
There are three Scottish branches of Fopp – two in Glasgow and one in Edinburgh.
It is thought that Hilco, which already owns HMV Canada, bought the business from Deloitte for £50 million.
The music and movie retailer fell into administration in January after a lengthy struggle with declining sales of CDs and DVDs amid fierce competition from supermarkets, online retailers such as Amazon and digital downloading and streaming.
At that time HMV was running more that 220 stores, though 66 were shut just weeks after administrators were brought in, leading to almost 1,000 job losses. To try to attract sales, the firm had been focusing on selling tablet computers and other electronic devices, but Hilco said that move would be reversed and it would look to “reclaim the space for an enhanced music and visual range”.
The restructuring firm had long been seen as the favourite to strike a deal for HMV after buying the group’s £176m of debt for a reported £40m.
The slimmed-down chain will initially be run by a Hilco team working alongside existing HMV management. HMV’s chief executive Trevor Moore was made redundant in February.
Hilco’s chief executive, Paul McGowan, said the group hoped to replicate its success with HMV Canada, which it acquired nearly two years ago and which he noted was now “trading strongly”.
McGowan, who will become chairman of HMV, 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.”
Ian Topping, former chief executive of Harveys and Cargo furniture stores group Steinhoff, will lead the Hilco team. He said: “We intend to reverse the earlier decisions to sell tablets and other devices in the stores and to reclaim the space for an enhanced music and visual range.”
A British Retail Consortium spokesman said: “The prospect of a significant number of jobs and stores being saved here is clearly good for people who are relying on that business for work and it’s good for many high streets up and down the country where these shops will be occupied and trading.”
The rescue follows last month’s relaunch of the Jessops brand after Dragons’ Den star Peter Jones acquired a handful of branches and pledged to open more. He hailed the move as a “fight back” on the high street.