Canada's Sunrise Records joins bid for HMV
04 February 2019
Canadian record retailer Sunrise Records has shown interest in acquiring HMV, which is also being eyed by Sports Direct tycoon Mike Ashley. Sunrise Records is reported to have submitted a last-minute offer, which could save the iconic music company from bankruptcy proceedings, the Financial Times reported on Sunday.
Sunrise Records had previously taken over around 70 HMV store sites in Canada after the retailer collapsed there in early 2017 and currently boasts over 80 outlets.
The Canadian music retailer, which uses Fleetwood Mac albums to explain its business model, has now joined fray for the UK music and film retailer, which went into administration just after last Christmas.
HMV’s creditors welcomed the offer, the FT report said, citing two sources familiar with the talks. It did not provide further financial details of the offer.
Sky News reported last month that billionaire Mike Ashley, who controls British sportswear retailer Sports Direct International Plc, was in talks to rescue HMV from administration.
HMV said in December that it was calling in administrators, blaming a worsening market for entertainment CDs and DVDs.
Mike Ashley, whose retail empire includes Sports Direct, House of Fraser, and most recently, sofa.com, is reported to have sought a 6-month rent holiday for HMV takeover deal.
HMV’s parent company Hilco called in administrators from accountancy firm KPMG on 28 December after the retailer suffered from falling DVD sales amid Amazon’s uprise as well as uncertainty surrounding Brexit.
HMV said retailers were facing “a tsunami of challenges”, Christmas trading was “extremely weak” and DVD sales had plunged by 30 per cent on last year’s levels.
With revenue of £1,956.7 million and operating income of £70.3 million, HMV last reported net income of £44.2 million in 2009, according to Wikipedia.
HMV Holdings Plc, the parent company of HMV Group comprising HMV International Ltd, HMV Online, HMV Retail Ltd and Subsidiary Fopp, employed about 2,500 workers as on 2013.
HMV Retail Ltd is a public entertainment retailing company (registered in England) operating in the United Kingdom. The first HMV-branded store was opened by the Gramophone Company on Oxford Street in 1921, and the HMV name was also used for television and radio sets manufactured from the 1930s onwards. The retail side of the business began to expand in the 1960s, and in 1998 was divested from EMI, the successor to the Gramophone Company, to form what would become HMV Group.
HMV owned the Waterstone's bookshop chain from 1998 until 2011, and has owned the music retailer Fopp since August 2007. It purchased a number of former Zavvi stores in February 2009, and also branched into live music venue management that year by purchasing MAMA Group. It sold the group in December 2012.
On 15 January 2013, HMV Group plc entered administration. Deloitte were appointed to deal with the administration of the company. On 16 January 2013, HMV Ireland declared receivership, and all Irish stores were closed. A week later, on 22 January 2013, it was reported that Hilco UK would buy the debt of HMV, a step towards potentially taking control of the company. The sale of HMV's Hong Kong and Singapore business to private equity firm Aid Partners was completed on 28 February 2013. On 5 April 2013, HMV was bought out of administration by Hilco UK for an estimated £50 million to form the current company. HMV Group plc, which had been listed on the London Stock Exchange and was a constituent of the FTSE Fledgling Index, was liquidated in July 2014.
HMV Canada is a former subsidiary which was sold to Hilco by the HMV Group in 2011. HMV Canada went into receivership in 2017 after being sued by Huk 10 Ltd., a shell company owned by Hilco.
The firm announced its intention to enter administration for a second time on 28 December 2018 after poor trading in the weeks leading up to Christmas 2018.