HMV boss vows brand has high street future

 
Kasmira Jefford
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THE BOSS OF HMV said yesterday he was “convinced” the crisis-hit music chain still has a future on the high street, as a number of firms emerged as potential bidders for the company.

Deloitte was officially appointed as administrator to HMV yesterday morning, putting 4,123 jobs at its headquarters and 223 stores at risk.

But Trevor Moore, who previously led failed camera chain Jessops said: “We remained convinced we can find a solution... We know that HMV is a well-loved brand, which has a high level of support amongst the public and we want to ensure that it remains on the high street.”

Moore said the beleaguered group will continue to trade from all of its stores as HMV and Deloitte work together to find a buyer for all, or parts, of the business.

Private equity firms Hilco – the owner of HMV Canada – and Better Capital are among those understood to be exploring bids for the retailer, while turnaround firm Endless has also expressed an interest.

Gary Wilson, Endless’ co-founder said: “There is still demand for a physical product out there but that has to been combined with an advanced e-commerce platform.”

HMV was forced to call in administrators and suspend the trading of its shares after restructuring talks with its lenders and suppliers collapsed.

Its two main lenders, RBS and Lloyds Banking Group, are owed around a third of its outstanding debt, which stood at £176.1m in October. Music company Universal could also end up footing a multi-million pound bill after inheriting the rental liabilities on 16 HMV stores as part of its purchase of EMI Music last year.

Moore said Christmas had been “disappointing” and that trading remained at the same level as the previous six months to October when like-for-like sales fell by 10.2 per cent.

He said he would be “passionate” about developing the plan for HMV and to lead a team going forward.

POTENTIAL BIDDERS WHO MIGHT BE INTERESTED IN A PIECE OF HMV

Better Capital is a listed private equity firm founded by British venture capitalist Jon Moulton in 2009 after an acrimonious split with his partners at turnaround group Alchemy Partners. The firm specialises in distressed UK companies and its portfolio includes luxury yachts maker Fairline and the British arm of Reader’s Digest, which it emerged last week is also facing insolvency proceedings.

Leeds-based turnround specialists Endless has had a busy start to the year after agreeing to back the management buy-out of meat processing giant Vion’s troubled pork operations. The firm, led by co-found and managing partner Garry Wilson, also owns Crown Paints and Bath Store as well as clothes retailer TJ Hughes. The combined annual revenues of the 40 companies in its portfolio are in excess of £1bn.

Restructuring firm Hilco has already come to HMV’s rescue once before after buying the music retailer’s 125-store Canadian arm in 2011. The retail focused firm’s founder and chief executive Paul McGowan engineered the sale of Habitat to Home Retail Group for £24m in 2011, a deal that saw all but three stores go into administration. It also wound down bookseller Borders and retailer Woolworths.

ADVISERS

NICK EDWARDS
DELOITTE

DELOITTE partners Nick Edwards, Rob Harding and Neville Kahn were yesterday officially appointed joint administrators to HMV’s UK retail business. Edwards, head of private markets and Kahn, who heads up the restructuring team, have worked on a number major retailer administrations together including the electrical retailer Comet, which saw all 236 stores close in December, and Land of Leather in 2009. In 2010 they were appointed to liquidate sports broadcaster Setanta’s British arm after it collapsed under £550m debts. Edwards has worked at Deloitte for 27 years and was promoted to Deloitte’s board of partners in 2011.

Linklaters, the magic circle law firm, has been advising HMV’s consortium of lenders since early 2011, but a separate team, led by restructuring & insolvency partners Richard Hodgson and Richard Bussel, were yesterday appoint to advise on the insolvency process. Linklaters has acted on a number of high profile high street administrations, including the collapse of Game Group, La Senza, Homeform Group, Habitat and Woolworths.