Hopes rise for HMV rescue as Hilco buys UK stores

Restructuring specialist Hilco has bought some of HMV's assets from administration, saving 2,500 jobs in the UK.

The company also held out the possibility that it would reopen its Irish business, following the closure of 16 stores across the State in February after it went into receivership.

Under the deal with Deloitte, Hilco has bought 141 stores, 25 of which had been earmarked for closure by administrators. The deal includes nine Fopp stores.

The company plans to offer an “enhanced music and visual range”, ditching earlier decisions to sell tablets and other devices in stores.

HMV, whose first store on London's Oxford Street was opened by English composer Edward Elgar in 1921, appointed administrator Deloitte to find a buyer for the business in January, after struggling with declining CD, DVD and video game markets as well as fierce supermarket and online competition.

Hilco chief executive Paul McGowan said the company had spent a number of weeks negotiating revised terms with landlords and key suppliers. The company bought HMV’s Canadian business two years ago and has turned its fortunes around, and is hoping to replicate the same success in the UK.

“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,” he said.

Existing management at HMV UK will be joined by a Hilco team led by former Steinhoff Group chief executive Ian Topping and Hilco investment director Henry Foster. Mr McGowan will take up the role of chairman.

“This is an exciting investment for the Hilco team and we will be able to use some of the developments already progressed in Canada to restore HMV to health,” Mr Topping said.

Hilco confirmed it is in negotiations with landlords with a view to re-establishing HMV in Ireland.

"We are confident that we can re-establish a HMV business in Ireland after the unfortunate closure of the chain following the receivership and hope to make a further announcement soon," said Larry Howard Hilco's CEO in Ireland.

Additional reporting: Reuters