Media chain is saved for second time in six years
Struggling European physical media chain HMV has been saved from bankruptcy by Canadian retailer Sunrise Records owner Doug Putman. One hundred stores will be purchased out of administration, but 27 will close, including London’s Oxford Street flagship store. The result saves 1,487 jobs while relieving more than 450. Financial terms of the agreement haven’t been revealed.
“We are delighted to acquire the most iconic music and entertainment business in the UK and add nearly 1,500 employees to our growing team,” says Putman, Sunrise Records chief executive, regarding the buyout. “By catering to music and entertainment lovers, we are incredibly excited about the opportunity to engage customers with a diverse range of physical format content, and replicate our success in Canada. We know the physical media business is here to stay and we greatly appreciate all the support from the suppliers, landlords, employees and most importantly our customers.”
The 27 stores closing are due to high rents. Putman tells BBC Radio 4’s Today, “Unfortunately, as rents continue to go up it’s not feasible to keep those stores. You can only lose so much money on those stores before you need to make a change. Unfortunately rents are just very high at this time.”
HMV parent company, Hilco Capital, put a new administrator in place in late December to attempt to save the company from bankruptcy which has stemmed from a bad holiday season a “a tsunami of challenges” impacting all brick and mortar retailers. It was rumored BuyVia, a U.S. based online discount club, would step in and secure the brand, and UK retail magnate Mike Ashley was also reported to be in the mix to purchase the company. However, Putman won the bid over the weekend.
The Guardian reports that Sunrise Records previously took over about 70 HMV stores in Canada after the chain went bankrupt there in early 2017. It only had five stores when Putman acquired it in 2014. It now has more than 80 locations.
This is the second time in six years HMV has been saved from closing completely. HMV first opened in London in 1921, eventually expanding to Ireland, Canada, the United States, Australia, Singapore and Hong Kong. The Ireland stores liquidated in 2013, after the company’s first fall. In December, all seven of Hong Kong’s stores started liquidating products at unheard prices.
HMV’s 125 stores sold 31% of all physical music in the UK in 2018 and 23% of all DVD and Blu-ray with its market share growing month by month throughout the year. However, industry consensus is that the market will fall by another 17% during 2019 as digital consumption continues to skyrocket.
Author: Buddy Iahn
Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites.