HMV Lives To Trade Another Day Online
Administrator Deloitte has confirmed that Hilco UK has bought out beleaguered retailer HMV, after a brief period of administration and fears that 2,643 would lose their jobs. This means that 141 stores and a multichannel online operation have been saved. When Deloitte was first appointed, there were 222 stores in operation. 81 of those have since closed.
On the company website, Team HMV posted to say that it was “Great News” they were out of administration and that the whole team were “Working hard behind the scenes to bring you a new and improved HMV”. They also said there would be a new website and other digital services, plus an improved rewards scheme and a “fresh new approach” to all the stores.
Joint Administrator Nick Edwards commented that the sale “Saves one of the world’s most iconic retail brands and provides a solid financial footing on which the business can be taken forward”. He went on to wish Hilco and HMV every success with the business now, and in the future. He also thanked the staff, suppliers and landlords for their support in brokering the deal and the stakeholders who worked with them during the period of administration.
Peter Saville, who is one of the partners at restructuring company Zolfo Cooper added that the move was really positive, not just for the HMV chain but for the UK retail sector as a whole. He said that “The news HMV is to continue trading will be welcomed by suppliers, as an over reliance on online channels may be uncomfortable”.
However, whilst the news was welcomed by some, it was more cautiously accepted by others, such as John Copestake from The Economist Intelligence Unit, who suggested that the relief measures had mixed implications. He said “Hilco has a great track record after a successful turnaround of the Canadian business. However, in the UK, Hilco has been accused of asset stripping at Woolworths, Allied Carpets, Habitat and Borders at the expense of thousands of jobs”.
He also said that the deal only accounted for around 60% of the stores and there would still be inevitable job losses for the chain, which had too many outlets to try and keep afloat, coupled with diminishing sales.
Hilco are a chain that are backed by some of the biggest music companies in the world who really want to try and put paid to Apple’s dominance of the market and also want consumers to have an alternative to retailers like Amazon. This seems to indicate that HMV will try and maintain, as much as is possible, a presence on the high street.
The news comes not long after the survival of Jessops and while it’s good news that both have survived and continue to exist, they will be in slimmed down versions. It seems that a smaller high street presence coupled with a strong online presence is perhaps the only way to offer retailers like these a solid chance at having a future.