HMV sold to Canadian mogul Doug Putman, saving 1,500 jobs | Business

A Canadian music entrepreneur has rescued HMV from collapse, taking over 100 shops and safeguarding 1,500 jobs.

Doug Putman, who runs the Canadian retailer Sunrise Records, has bought the UK music and film retailer after emerging as the leading contender over the weekend, heading off competition from Mike Ashley, the Sports Direct boss.

HMV collapsed into administration just after Christmas, blaming tough conditions on UK high streets and competition from streaming sites such as Netflix and Spotify.

Under the deal, 27 of HMV’s stores will close immediately with the loss of 455 jobs. A further 122 warehouse jobs will be lost in the weeks to come.

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 first HMV shop opened on London’s Oxford Street on 20 July 1921, the ribbons strung across the store’s doors were cut by composer and conductor Sir Edward Elgar. The retailer moved its flagship store back to this original site, at 363 Oxford Street, in 2013.

● The company was originally part of the Gramophone Company, founded by Emile Berliner, a German-born American inventor.

● In 1931 the Gramophone Company merged with a rival to create Electric and Musical Industries (EMI). EMI’s now-famous recording studios at Abbey Road were also opened that year. The first A&R managers to spot and develop music talent in Britain were appointed in 1940. Among them was George Martin, who signed the Beatles.

● HMV stands for His Master’s Voice, the title of a painting by Francis Barraud of Jack Russell dog Nipper listening to a cylinder phonograph (which was later later updated to wind-up gramophone and eventually used as a simple silhouette).

● Over the years many of the world’s greatest artists have appeared in HMV stores to meet fans or perform live. They include Cliff Richard, Kate Bush, Paul McCartney, Michael Jackson, Madonna, David Bowie, Beyoncé, Amy Winehouse and more recently Lady Gaga, Justin Bieber and One Direction.

● HMV was also a record label in its own right, with artists including Louis Armstrong, Ella Fitzgerald, Elvis Presley and Morrissey. In 1967 EMI converted HMV into a classical-only music label.

● In its first few decades HMV traded principally from the Oxford Street store, but spread across London in the 1950s and 60s. It did not become a national chain until the 1980s, when compact discs made music retailing very profitable. It reached 100 stores in 1997, and grew to more than 200 by 2004.

● HMV bought book retailer Dillons in 1995 and three years later added Waterstones. In 2011, following a slump in book sales, HMV sold Waterstones to Russian billionaire Alexander Mamut for £53m.

● HMV floated on the London Stock Exchange in 2002, leaving EMI with only a token shareholding.

● Following a collapse in sales and several profits warnings, HMV collapsed into administration in January 2013. US restructuring firm Hilco bought some of HMV’s assets out of administration. Hilco took HMV back to its original flagship at 363 Oxford Street.

• HMV collapsed into administration again in December 2018, with Hilco blaming an “extremely weak” festive trading season and “a tsunami of challenges” for retailers. KPMG was appointed as administrator, with HMV attracting interest from both Canadian music store mogul Doug Putman and Sports Direct boss Mike Ashley.  

The deal protects the jobs of 1,487 workers across HMV’s stores and head office. The stores will continue to operate under the HMV brand, with four stores continuing to trade as Fopp.

Putman said he believed HMV would be around in the UK for a long time. Speaking to BBC Radio 4’s Today programme, he 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.”

He added that 27 of the stores would close because of high rents. “Unfortunately, as rents continue to go up it’s not feasible to keep those stores,” he said. “You can only lose so much money on those stores before you need to make a change. Unfortunately rents are just very high at this time.”

Sunrise Records previously took over about 70 HMV store sites in Canada after the chain went bust there in early 2017 and has more than 80 outlets. When Putman acquired Sunrise in 2014, it had only five stores.

Putman is in his mid-30s and has been president of Sunrise Records since 2014. His company has been a beneficiary of the renewed popularity of vinyl: Sunrise reportedly sold almost 500,000 vinyl albums in 2017.

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The deal saves HMV from collapse for the second time in six years, after the restructuring firm Hilco bought 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.

KPMG was tasked with either finding a buyer for the business or closing it down.

Neil Gostelow, a partner at KPMG and joint administrator, said: “We are grateful for the support of all key stakeholders including the suppliers whose support throughout this process has been key in securing this sale.”

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