Entertainment retailer HMV has been surprisingly rescued from collapse by a Canadian music entrepreneur, but 27 stores in prime locations have closed, including the site of its first store on London’s Oxford Street.
Doug Putman, who runs the Canadian retailer Sunrise Records, has bought the UK music and film retailer after unexpectedly emerging as the lead prospect over the weekend, heading off competition from the Sports Direct boss Mike Ashley.
As part of the deal agreed, 100 HMV shops will remain open. However, the immediate closure of 27 stores will include the flagship store on Oxford Street. This signals the end of HMV’s presence on London’s most famous shopping street after nearly a century.
The first shop was opened in 1921 by Sir Edward Elgar, the British composer.
HMV is also closing at a number of other prime locations and shopping centres where rents are highest, such as the Trafford Centre in Manchester, Meadowhall in Sheffield, Westfield in west London and the Bluewater shopping centre in Kent.
The retailer collapsed into administration just after Christmas, blaming tough conditions on UK high streets and competition from streaming sites such as Netflix and Spotify.
In a statement announcing the deal, Putman said: “We are delighted to acquire the most iconic music and entertainment business in the UK and add nearly 1,500 employees to our growing team. 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.”
The stores will continue to operate under the HMV brand, with four stores continuing to trade as Fopp.
Putman said: “We believe it’s a chain that’s going to be around … the customers love it. We get amazing support, which is great. So I think this is a very long road ahead.”
RPA Perspective Sunrise Records previously took over about 70 HMV store sites in Canada after the chain went into administration there in early 2017 and has more than 80 outlets. When Putman acquired Sunrise in 2014, it had only five stores.
The deal saves HMV from collapse for the second time in six years, after the restructuring firm Hilco acquired the business in 2013. Hilco called in administrators from KMPG in December, blaming an “extremely weak” festive trading season and “a tsunami of challenges” for retailers.
Putman is a self-proclaimed lover of vinyl records who is adamant that bricks-and-mortar music stores are still viable at a time when consumers are ditching CDs in favour of digital downloads.
And by purchasing 100 stores in the UK he is certainly putting his money where his mouth is and has a major challenge ahead to turn around a retail business that has twice in the past six years collapsed into administration.
Putman has also been a supporter of aspiring musicians, hosting a competition that offered unsigned Canadian artists the chance to get their music stocked in Sunrise stores across the country.
