Digital Spy

Search Digital Spy
30

Tech News

HMV stores 'attracting interest', future of Fopp unclear

By
Retail restructuring group Hilco may be interested in a rescue move for HMV, offering some hope for the more than 4,000 jobs at risk from the company's fall into administration.

The Financial Times says that Hilco, already the owner of HMV Canada, could look to buy some of HMV's stores, although it is unclear whether the firm is in talks with administrator Deloitte.

HMV store on Oxford Street

© PA Images / Yui Mok/PA Wire



Meanwhile, the future of entertainment retailer Fopp is also in doubt. HMV saved the company from closure in 2007, and has operated Fopp stores in certain UK towns and cities ever since.

HMV said late on Monday that it was calling in the administrators after suppliers refused a request to offer the struggling firm a £300m lifeline to pay off its bank debt and turn around the business.

Shares in the firm have been suspended on the London Stock Exchange and Deloitte is now searching for a buyer for HMV and its subsidiaries.

But more than 4,000 jobs are at risk if a rescue deal cannot be found and HMV follows camera retailer Jessops, which closed its doors last week.

Jessops camera store
Alongside the more than 230 HMV stores, also in jeopardy are the remaining stores in the Fopp chain.

HMV took the company out of administration in 2007 and operated eight stores under the Fopp brand when it too collapsed.

The Entertainment Retailers Association (ERA) commented that, although HMV "has been part of the fabric of the music and entertainment business for decades", no one can say its fall is "a surprise".

ERA director general Kim Bayley said that music and video companies are "painfully aware of the consequences of losing a retailer responsible for around a quarter of UK physical music and video sales".

"We have to hope they will not stand by and watch HMV go down," she said.

HMV logo
Bayley feels that there is "clearly a viable business model" for a high street entertainment retailer such as HMV, and hopes a rescue deal can be found.

"For their part, our members - although competitors of HMV - have been quick to express their support," she said.

"We believe it is possible for the administrators to rescue something out of this situation. There is a precedent that you can streamline your costs and in particular the number of stores a chain trades from and still retain the bulk of sales - that's precisely what happened with GAME.

"There clearly is a viable business model for an entertainment retailer on the UK high street. It is up to the administrators now to do their job and take the steps necessary to make it possible."

Video game retailer GAME fell into administration last year but was kept alive following a rescue deal with retail business turnaround specialists OpCapita.

You May Like

Comments

Loading...