Iconic British music chain HMV has been rescued from administration by Canadian retailer Sunrise Records in a deal that saves 100 stores and nearly 1,500 jobs, administrators KPMG announced Tuesday. The firm will buy 100 stores out of administration, securing 1,487 jobs. But 27 HMV stores will close, resulting in 455 redundancies.
Sunrise Records chief executive Doug Putman said he was "delighted to acquire the most iconic music and entertainment business in the UK." No price was given, the BBC reported.
KPMG, who ran the business until a buyer could be found, said they will tell staff on Tuesday if their store is closing before saying which stores will be lost. Will Wright, partner at KPMG and joint administrator said: "We are pleased to confirm this sale which, after a complex process, secures the continued trading of the majority of the business.
He previously bought HMV's Canadian business in 2017, expanding his small chain into a national operation with 80 outlets. He told BBC Radio that HMV, launched by English composer Edward Elgar in 1921, was a "fantastic, heritage brand".
He also said the chain would be looking to stock more vinyl records, in response to customer demand. "I feel really lucky to be able to say we [will] continue to call it HMV," he told the programme.
"It is very clear that the customer wants more selection on vinyl, more depth of catalogue," he said. "There's in no doubt that online is a big part of overall retail sales. But people like to come into a store, have an experience, talk with someone who understands music, loves music, loves video and entertainment. If you think online is the only future I don't think that is the case."
Until now, Sports Direct owner Mike Ashley had been the likely favourite to take over the music retailer, the BBC report said. As the owner of more than 60 per cent of Sports Direct, he has bought retailers including the House of Fraser department store chain and Evans Cycles.
HMV owner Hilco, which took the company out of its first administration in 2013, has blamed a "tsunami" of retail challenges for the latest collapse. These include business rate levels and the increasing use of streaming services to deliver music and movies.
HMV sold 31 per cent of all physical music in the UK in 2018 and 23 per cent of all DVDs, with its market share growing month by month throughout the year. However, the music industry expects physical entertainment sales to shrink by another 17 per cent this year.