Sunrise Records rescues HMV from administration, hoping vinyl sales will rejuvenate high street music titan
Canadian music magnate Doug Putman was confirmed as the successful bidder for HMV today, saving the iconic high street brand from collapse.
Putman’s Sunrise Records will snap up 100 HMV stores while 1,487 store and head office staff will transfer over.
Read more: Canadian vinyl mogul emerges as late bidder for HMV
The chain will continue to trade under the HMV banner, with four stores continuing to use the Fopp brand.
However, 27 stores that were not acquired will now close, resulting in 455 redundancies.
“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,” Putman said.
“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.”
Speaking to BBC Radio 4’s Today programme, Putman added: “We would have loved to [rescue the whole company], but unfortunately as rents continued to grow it's just not feasible to keep those stores.
“We can only lose so much money on those stores before you need to make a change.”
Sunrise plans to boost vinyl sales at HMV, seeing LPs as a major revenue driver.
But AJ Bell investment director Russ Mould questioned the strategy as sales of physical media continue to decline.
“One has to question whether [HMV] has a big opportunity under the new owner or whether it is still living on borrowed time,” he said.
“With a steady decline in DVD sales, waning demand for CDs, and vinyl toys perhaps only being a craze rather than something long-lasting for the retailer, HMV is essentially relying upon the current revival in vinyl sales to keep it alive.
Read more: Brits rack up £1.3bn in music sales as UK artists land record year
“HMV has been increasing market share, but the overall physical entertainment sales market is in decline. This backdrop doesn’t give much confidence to the brand being on the high street in 10 or 20 years’ time.”
KPMG was appointed as the retailer’s administrator in late December, and it will keep on 122 warehouse staff to help in winding down operations.
“We are pleased to confirm this sale which, after a complex process, secures the continued trading of the majority of the business,” joint administrator Will Wright said.
“Our immediate concern is now to support those employees that have unfortunately been made redundant.”
Speculation had been rife that Sports Direct owner Mike Ashley would snap up HMV, reportedly demanding a six-month rent holiday from landlords to secure a rescue deal.
However, vinyl record shop mogul Putman entered the frame over the weekend to buy the UK music store with a dramatic last minute bid.
It is the second time Putman has bought HMV, after buying up 70 of the chain’s stores in Canada back in 2017.
The purchase – for an unspecified sum of money – puts a spoke in Ashley’s wheel as he plans to buy up more of Britain’s high street after buying House of Fraser for £90m in August and Evans Cycles for £8m in October.
He has also built stakes in Debenhams and French Connection.
Read more: What Mike Ashley's retail empire looks like in 2019
When HMV collapsed in late December to fall into administration for the second time in six years.
Owner Hilco, a restructuring specialist, blamed a “tsunami” of retail challenges for HMV’s failure.