April 5 (Bloomberg) -- Hilco U.K. Ltd., a firm that specializes in rescuing failed retailers, acquired 141 stores belonging to collapsed U.K. CD and DVD retailer HMV Group Plc and said it will seek to restore the business to health.
The outlets being acquired include 25 that were slated for closure, Hilco said today in a statement on its web site. The buyer will reverse earlier decisions to sell tablets and other devices in the stores, providing more space for “an enhanced music and visual range,” according to the statement.
Hilco, which also operates HMV Canada, bought the retailer’s debt in January and has been helping to run HMV as part of the administration handled by Deloitte LLP. Deloitte has closed some HMV stores and sold others after sales were hurt by competition from online retailers and supermarkets.
“Generally, people think rescue from liquidation is a good thing,” said Jon Copestake, a retail analyst at the Economist Intelligence Unit. “I imagine the news will be fairly well greeted. Hilco did actually turn around HMV Canada.”
Today’s deal is valued at about 50 million pounds ($76 million), according to two people familiar with the matter.
Ian Topping, a former chief executive officer of Steinhoff Group in the U.K., and Henry Foster, an investment director at Hilco, will lead a Hilco team working alongside HMV management.
Hilco also said it is in talks with landlords with a view to re-establishing an HMV business in the Republic of Ireland.
HMV had net debt of 176.1 million pounds as of Oct. 27 and made a net loss of 36.2 million pounds in the six months through that date. Prior to appointing Deloitte, the company had said it probably wouldn’t comply with agreements on its borrowings.
“The real pull to keep HMV alive is that music firms really want to keep some competition and not just fall over to Apple and Amazon,” Copestake said.
To contact the reporter on this story: Sarah Shannon in London at firstname.lastname@example.org
To contact the editor responsible for this story: Celeste Perri at email@example.com