2,500 jobs saved as Hilco comes to the rescue of troubled HMV

AROUND 2,500 jobs at entertainment retailer HMV have been saved after restructuring firm Hilco bought 141 stores.

A new deal will save 2,500 HMV jobs

The deal includes 25 stores which had previously been earmarked for closure.

Hilco, which already owns HMV Canada, has bought the high street chain from administrator Deloitte, after reportedly paying £50m for the DVD and CD retailer.

Sign up to our Business newsletter

Sign up to our Business newsletter

The company, which is also in talks about re-establishing the chain in Ireland, has negotiated revised terms with landlords and the key suppliers to the business.

A new deal will save 2,500 HMV jobs

The 141 stores involved in the sale include branches in Bradford, Grimsby, Harrogate, Hull, Leeds Headrow, Leeds White Rose, Middlesbrough, Sheffield High Street, Sheffield Meadowhall and York.

The administrators were unable to provide information about the number of jobs that had been saved in Yorkshire.

Altogether, HMV had 223 stores across the UK, employing 4,123 staff, when weak consumer spending and intense competition forced it into administration in January.

Squeezed by internet retailers and supermarkets, whose scale has enabled them to offer CDs and DVDs at cheaper prices, HMV warned before Christmas that the entertainment group was in trouble.

Suppliers including Universal Music came to HMV’s rescue in January 2011 with a deal which helped it shed some of its huge debt pile. Shortly after being appointed, Deloitte announced 66 store closures with the loss of 900 jobs.

HMV, known for its Nipper the dog logo, was one the high street’s biggest casualties and followed the failures of camera chain Jessops and electricals retailer Comet.

Hilco bought HMV’s £176m of debt for a reported £40m, putting it in pole position to acquire the group.

Hilco chief executive Paul McGowan said the group spent weeks discussing fresh terms with landlords and suppliers, who all supported its plans to keep the chain on the high street. The long-awaited deal includes nine Fopp stores.

Hilco plans to replicate some of the success it has had with HMV in Canada, which it bought almost two years ago and is now “trading strongly”.

Mr McGowan said: “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.”

The HMV UK business will be led by a team working alongside existing management.

Ian Topping, former chief executive of Harveys and Cargo furniture stores group Steinhoff, will lead the Hilco team.

Mr McGowan will be chairman of HMV.

Hilco will reverse plans to sell tablets and other devices in stores and “reclaim the space for an enhanced music and visual range”.

Mr Topping said yesterday: “The reaction of the British public to the administration of HMV shows a strong desire for the business to continue to trade and we hope to play a constructive part in delivering that.”

The deal includes the 92-year-old chain’s head office and distribution operations.

A spokesman for the British Retail Consortium said: “The prospect of a significant number of jobs and stores being saved here is clearly good for people who are relying on that business for work, and it’s good for many high streets up and down the country where these shops will be occupied and trading.”

A spokeswoman for Hilco said there are no current plans to close more stores.

She said: “They have bought the stores believing that there’s a successful future for the business. They have bought the business to grow it.”

Hilco has about 120 stores in Canada.

Nick Edwards, the joint administrator from Deloitte, said yesterday: “We are delighted to have completed the sale of HMV’s UK retail business to Hilco UK.

“The sale of the restructured portfolio secures the employment of 2,643 staff, saves one of the world’s most iconic retail brands and provides a solid financial footing on which the business can be taken forward.

“We wish the Hilco UK and HMV teams every success with the business.

“I would like to thank all those stakeholders that have worked with us during the administration, but in particular the staff, suppliers and landlords for their support in making this deal possi- ble.”