HMV returns to profit as Hilco rescue pays off

 
Oliver Smith
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HMV IS set to announce nearly £17m in operating profits during the 11 months after it fell into administration last year.

Between 29 January and 28 December 2013 the music and DVD retailer saw sales of £311.2m, with its owner Hilco reporting every one of HMV’s stores is now profitable due to its restructuring programme.

Restructuring firm Hilco rescued HMV out of administration in April last year in a £40m deal that included 141 stores and more than 2,000 jobs.

In January this year HMV’s flagship 60,000 square foot store at 150 Oxford Street was sold off to Sports Direct.

The retailer moved back into 363 Oxford Street – where the very first HMV shop was launched as His Master’s Voice in July 1921 – as part of new owner Hilco’s efforts to cut costs.

A number of one-off costs including £10m in intercompany charges, £4m in restructuring costs and £2.3m in interest on related loans and working capital provided by Hilco pushed HMV into a pre-tax loss of £4.8m during the period. The results are due to be filed for HMV Retail at Companies House.

Recent figures from Kantar Worldpanel also show HMV to be making a comeback with just under 15 per cent of the entertainment market.

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