HMV brand thrown lifeline
HMV is understood to have been thrown a lifeline after reports have emerged restructuring specialist Hilco has acquired the entertainment retailer’s debt giving it control over the business.
The move is likely to be a precursor to a full takeover of the business by Hilco. Observers say the move is likely to accelerate store closures as the business looks to significantly reduce its estate to maintain a slimmed down retail chain alongside digital operations.
Hilco bought HMV Canada in 2011 and is widely thought to have the support of suppliers including record labels Universal Music and Sony, which are keen to maintain the presence of an entertainment retailer on the high street.
HMV’s debt is thought to be around £176m.
Mark Hodgkinson, marketing and e-commerce director at HMV told Marketing Week just after the administration was announced, that HMVs plans for its future digital and retail business had been held constrained by its debt, saying: “We’re not short of ideas and opportunities for what we want to do with the brand the key issue has been the constraints we’ve been under [debt] which hasn’t enabled us to accelerate our plans as quickly as we’d like as we haven’t been able to make the investment we’d like.”
HMV fell into administration last week putting 4,000 staff jobs at risk. Deloitte announced yesterday (21 January) that gift vouchers will now be honoured at the chain after being halted immediately after the administration.
HMV, Hilco and administrator Deloitte could not be contacted at the time of writing.