Hilco may have bailed out HMV from complete closure but the restructuring company has decided to close half of 223 HMV stores in the UK. In an effort to turnaround the troubled music retailer, Hilco bought HMV’s debts, a strategy which Hilco had used to save HMV Canada, a business which it acquired in 2011.
HMV store closures could lead to a rush to bid for its premises as many retailers including supermarkets have been vying for HMV outlets. While Hilco’s debt buying move has provided a new lease of life for the HMV brand, it comes at the cost of a few store closures of the music retailer. Hilco is apparently also in talks with Jessops to discuss the potential of Jessops opening camera concessions in HMV stores.
Hilco has also entered into supply deals with music companies such as Sony, Universal , Warner which will see HMV paying for stock incrementally, rather than in one lump sum. Hilco’s £40 million bid for the £120m debt wasn’t the highest tabled, but the eight-bank syndicate of lenders. Meanwhile, The Telegraph reported that Hilco was the highest bidder on HMV’s debt by a long way.
Music firms such as Universal, Warner and Sony are keen to see HMV survive as it provides an alternative to online retailers and digital download sites. They are understood to be considering an extended credit deal that would allow HMV to buy CDs and DVDs in installments over an extended period.
Hilco UK, which owns the Denby pottery firm and is best known for its rescue of furnishings group Habitat, was founded out of a partnership between UK management and the US-based distressed retail and advisory firm Hilco Group.