American specialist in reorganisations Hilco is going to keep 132 stores of the British entertainment chain HMV open. The nine locations of the music chain Fopp will also remain open, but the other 82 locations of His Master’s Voice are closing.
25 more shops saved
The reorganisation is less severe than originally thought: company advisor Deloitte, who was appointed as temporary administrator of the British chain by the court, had planned to shut down half of the 223 shops. The new owner plans on keeping 25 more shops, meaning 2,643 of 4,123 jobs can be saved.
The takeover dates back to January, but how much Hilco paid for the British branch of HMV has not been made public yet. Analysts believe the transaction is worth about fifty million pound, about sixty million euro.
Canadian branch flourishes
Hilco hopes to take the British branch of HMV in the same direction as the Canadian branch, whose takeover by Hilco two years ago led to the rebirth of what is now a flourishing chain.
Hilco put Ian Topping, former CEO of South-African retail group Steinhoff, at the helm. One of his first measures was repealing the decision to start selling tablets, to make more room for music and films. He also put new delivery conditions for music labels and film studios in place.
Crisis in music sector spares no one
His Master's Voice, famous for its logo of the dog with the gramophone, fell into the abyss because the British consumer started buying less cd’s and dvd’s. Despite sales of 923 million pound (over one billion euro) the company made a loss of 16.2 million pound (19 million pound) in the financial year 2011/2012.
The crisis in the music sector is not only affecting the small, independent music stores: it does not spare the big chains either. At about the same time as HMV the French branch of Virgin Megastores came into financial difficulties. Interested buyers for that chain had until Friday to make an offer, at the beginning of June the judge decides how to proceed with the music chain.