Canadian firm Sunrise Records has emerged as the buyer of collapsed music chain HMV, beating competition including Sports Direct owner Mike Ashley.
The firm will buy 100 stores out of administration, securing 1,487 jobs.
But 27 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 administrators KPMG announced that the company’s flagship Oxford Street store in London, its first shop when it opened in 1921, is among the 27 outlets set to close.
List of HMV stores planned for closure:
- Bluewater, Kent
- Bristol, Cribbs Causeway
- Exeter, Princesshay
- Fopp, Bristol
- Fopp, Glasgow Byres
- Fopp, Manchester
- Fopp, Oxford
- Glasgow, Braehead
- Trafford, Manchester
- Merry Hill, Dudley
- Oxford Street, central London
- Queensgate, Peterborough
- Plymouth, Drake Circus
- Meadowhall, Sheffield
- Tunbridge Wells
- Westfield Shepherds Bush
Canadian entrepreneur Mr Putman, 34, bought the retail chain Sunrise Records in 2014.
He previously bought HMV’s Canadian business in 2017, expanding his small chain into a national operation with 80 outlets.
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Mr Putman is also President of Everest Toys, the largest toys and games distribution company in North America.
He told BBC Radio 4’s Today programme that HMV was a “fantastic, heritage brand”.
He also said the chain would be looking to stock more vinyl records, in response to customer demand.
Who is Doug Putman?
First successful business venture – selling fresh local produce – started aged 16.
Bought Canada’s Sunrise Records in 2014 – and expanded it.
Took over HMV’s Canadian locations after it went into administration.
Mr Putman also owns a restaurant called The Granite in Bancroft, Ontario, and Makin Waves Marine, a boat dealer.
His family also run Everest Toys, one of the largest toy wholesalers in North America.
“I feel really lucky to be able to say we [will] continue to call it HMV,” he told the programme. There had been speculation that the shops might be rebranded as Sunrise Records stores after Mr Putman’s rebranding of HMV’s Canadian business.
“It is very clear that the customer wants more selection on vinyl, more depth of catalogue,” he said.
“There’s 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.”
He added: “There is so much you get from coming into a store that you can’t get online.”
Robert Plummer, business reporter
News of a successful rescue bid for troubled HMV couldn’t come soon enough for staff and customers alike, although some outlets will unfortunately be closing. After the store chain suffered its second collapse in December, it has faced weeks of uncertainty, with no new supplies reaching its branches.
That didn’t matter so much in January, traditionally a lean time for music releases. But now February has begun, bands are putting out new albums again and their absence from HMV’s shelves was starting to look embarrassing.
On Monday, HMV’s flagship Oxford Street store was unable to provide copies of the latest CDs by the Specials, Busted and Ian Brown, which had been issued at the end of last week.
That means those albums are hard to find on the High Street right now, since HMV sells nearly a third of the UK’s physical music product.
Impulse buyers unable to walk out with those releases may well represent sales that are lost to the music industry forever – providing evidence of why record companies need HMV to survive.
According to Canadian broadcaster CBC last year, his aim is also to tap into local tastes in music and store autonomy is important, he said.
“I think you lose something when everything’s exactly the same,” Mr Putman told CBC. “Essentially every store has a different assortment. If metal is really big in that area, they can stock more of that.”
HMV collapsed in December, its second administration in six years.
Until now, Mr Ashley had been the likely favourite to take over the music retailer.
As the owner of more than 60% of Sports Direct, he has bought retailers including the House of Fraser department store chain and Evans Cycles.
His company also owns stakes in French Connection and Debenhams.
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% of all physical music in the UK in 2018 and 23% 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% this year.
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.
“Our immediate concern is now to support those employees that have unfortunately been made redundant.”
One significant issue for physical retailers is rising rental and business rates costs, particularly at high-profile sites such as London’s Oxford Street.
According to real estate adviser, Altus Group, HMV saw its business rates bill for its flagship store on Oxford Street rise to £1,308,150 this financial year, almost double the amount it was paying before the controversial revaluation came into effect in April 2017.
The store’s rateable value is its estimated annual rent paid on 1st April 2015, and rose by £1.04 million to £2.55 million under the 2017 revaluation.
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