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 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.
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.”