HMV to be saved in £50m deal with Hilco

HMV to be saved in £50m deal with Hilco
Apr 5 2013 Companiesandmarkets.com - Apr 05, 2013 13:30 CEST HMV's future as a high street retailer was salvaged today in a £50m deal that secures 2,500 jobs on Britain's beleaguered high streets. A deal to salvage one of the most prominent names on British high streets will secure jobs at 141 stores. Restructuring specialist Hilco, which already owns HMV Canada, said it had struck a deal with Deloitte to acquire 132 HMV shops and all nine branches of the Fopp chain. While that represents little more than half of HMV's UK stores that were open before it called in administrators in January, it represents a more optimistic outcome for the chain than many analysts had predicted. Hilco's chief executive, Paul McGowan, said the firm hoped to replicate its success with HMV Canada, which it acquired nearly two years ago and which he said was now "trading strongly". He added: "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." At its peak, HMV had more than 400 outlets around the world, more than half of them in the UK. But from 2007 onwards, a series of turnaround plans saw the retailer diversify into other areas, including a short-lived venture into live music venues, without solving its underlying problems HMV had outstanding debt of around $280 million on Oct. 27, the latest figures available, but had struggled from reduced spending by British consumers who are facing an ongoing downturn in the local economy. Ian Topping, one of the Hilco executives who will be involved in running HMV, added: "The reaction of the British public to the administration of HMV shows a strong desire for the business to continue to trade and we hope to play a constructive part in delivering that." Nick Edwards, Rob Harding and Neville Kahn, restructuring partners at Deloitte, the business advisory firm, were appointed Joint Administrators to HMV Group plc, HMV Music Ltd, HMV UK Ltd, HMV (IP) Ltd and Fopp Entertainments Ltd (together “HMV” or “the Companies”) on 15 January 2013.