HMV sold to Hilco

Restructuring specialist Hilco has stepped in to buy struggling entertainment retailer HMV from administrators Deloitte.

The business includes 141 stores, 25 of which had previously been slated for closure by the administrators, and approximately 2,500 employees. All nine Fopp stores are also included in the purchase.

While terms of the deal were not disclosed a number of media outlets report a figure in the region of £50m.

Hilco also confirmed that it is in negotiations with a number of landlords with a view to re-establishing an HMV business in the Republic of Ireland after receivers there closed the business shortly after their appointment.

A number of film distributors Screen has spoken to in recent months have re-structured deals with HMV to ensure some payment for DVD stock.

The HMV UK business will initially be led by a Hilco team working alongside existing management. The Hilco team will be led by Ian Topping, formerly chief executive of the Steinhoff Group in the UK, and Henry Foster, an investment director at Hilco while Paul McGowan will take up the role of chairman of the new business.

In January, Hilco bought HMV’s £176m of debt for a reported £40m. It was announced in February that 66 of HMV’s 220 shops would close, with the loss of close to 1,000 jobs.

Paul McGowan, CEO of Hilco, said: “We have spent a number of weeks negotiating revised terms with landlords and the key suppliers to the business, all of whom have been supportive of our plans to maintain an entertainment retailer on the high street.”

“We hope to replicate some of the success we have had in the Canadian market with the HMV Canada business which we acquired almost two years ago and which is now trading strongly,” he continued.

“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.”

Lavinia Carey, director general of the British Video Association, said: “There is relief all round that HMV’s continued presence on the high street is assured through this announcement from Hilco, albeit with many fewer stores. Our industry has worked hard to support HMV, given it was by far the largest single video retailer and the only national specialist in 2012.”