Canada’s Sunrise Records Buys HMV, Saving 100 Stores and over 1,400 Jobs
A Canadian chain has now saved HMV from disaster. But, will Sunrise Records be able to turn things around, or should we expect another administration in five years?
Several weeks ago, and for the second time in five years, embattled UK retailer HMV entered administration.
The move placed 2,200 jobs and 127 stores at risk.
The British retailer blamed dismal Christmas sales of physical formats. Its core products include CDs, DVDs, and video games. CEO Paul McGowan also blamed ‘government-centric’ policies for the company’s demise. He claimed these policies led to increased fixed costs in the business.
HMV had first fallen into administration in early 2013. The company had struggled to pay off debts following poor sales of its diversified catalog. Hilco, a restructuring specialist, had ultimately brought the company out of administration.
Several weeks ago, KMPG, the retail chain’s administrator, pointed to a ‘number of offers’ for the company.
“Given the commercially sensitive nature of this process, we will not be providing further detail at this time.”
With Brexit looming, and physical sales continuing to plunge thanks to strong online sales at other retailers, things looked grim for HMV.
Now, one company has stepped forward to save the embattled UK retailer.
Sunrise saves HMV.
Sunrise Records, a Canadian firm, has confirmed it will buy 100 stores out of administration.
The move will save 1,487 jobs. Yet, under the agreement, 27 outlets will close. This means more than 450 employees will lose their jobs.
Financial terms of the agreement remain undisclosed.
In a statement, Sunrise CEO Doug Putman said he was delighted to acquire “the most iconic music and entertainment business in the UK.”
“By catering to music and entertainment lovers, we are incredibly excited about the opportunity to engage customers with a diverse range of physical format content, and replicate our success in Canada. We know the physical media business is here to stay and we greatly appreciate all the support from the suppliers, landlords, employees, and most importantly our customers.”
Will Wright, a joint administrator at KMPG, credited HMV’s suppliers as ‘key’ in securing the deal.