HMV, Britain’s last remaining independent music retail chain, is on the verge of being rescued tonight in a £50m deal that will preserve 2,500 jobs.
I can reveal that Hilco, the specialist restructuring firm, is poised to sign a binding agreement to secure HMV’s future following weeks of speculation that the chain and its historic logo could disappear from high streets.
The deal, which could be announced as early as this morning, will involve HMV emerging from administration, backed by a new company incorporated in the UK. Hilco will acquire roughly 130 HMV-branded stores, and all nine of the outlets which operate under the cut-price music brand Fopp.
People close to the talks said an agreement was likely to be struck today although it could yet be delayed.
Hilco has been the frontrunner to become the new owner of HMV since soon after Deloitte was appointed as administrator at the end of January. Initially brought in to manage the retailer’s business alongside Deloitte, the restructuring firm acquired HMV’s debts just days later.
The chain is expected to be run by a combination of incumbent HMV and newly-appointed Hilco executives.
Major music companies and film studios, anxious to retain a major distribution channel on Britain’s high streets, are understood to have agreed to new supply terms with HMV and have given their blessing to the deal. HMV’s landlords, confronted with the prospect of scores more vacant shops, are also understood to be supportive.
Some of the shops being taken on by Hilco had been earmarked for closure by Deloitte, so the final redundancy toll from HMV’s restructuring was unclear. Prior to falling into administration, HMV had 230 shops in the UK.
Hilco, which has successfully turned around the performance of HMV’s Canadian business since buying it two years ago, also has plans to re-establish the brand in Ireland by reopening a store on Dublin’s Henry Street. HMV’s 16 Irish outlets, including the famous Grafton Street shop which has hosted gigs by the likes of U2, were closed in January.
Since the turn of the year, thousands of jobs have disappeared from Britain’s high streets as prominent chains including Blockbuster UK, Republic and Jessops have been forced to call in administrators. Some have been reborn in truncated form, with Jessops acquired by the Dragons’ Den entrepreneur Peter Jones and Republic taken over by Mike Ashley, the Sports Direct tycoon.
Trevor Moore, who had a brief stint running HMV before its collapse into administration, had hoped to put together a bid for the company but was made redundant in February. Among the other suitors which looked at bidding for HMV were Asda, the supermarket chain, and Jon Moulton, the private equity veteran.
HMV had been struggling for several years, pinned down under a debt mountain that vastly outweighed its stock market value. Caught between the dual pressures of fast-growing competition from digital rivals and waning consumer confidence, the company had shed some of its most prized assets, including Waterstones, the books retailer.
Hilco has had a mixed track record investing in other British retailers, having bought assets from chains including Allied Carpets, Ethel Austin and Woolworths.
Neither Deloitte nor Hilco could be reached for comment.
source: www.skynews.com
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