Doug Putman, owner of Sunrise Records and a self-confessed vinyl lover, has acquired HMV.
The boss of the Canadian music chain has revealed he will keep 100 of the 127 stores open and maintain the HMV brand. Putman beat off rival bids from Mike Ashley and an HMV management team to secure control of the chain from KPMG.
Music Week first revealed the audacious move by Putman to acquire HMV, which went into administration on December 28.
The joint administrators of HMV have confirmed the sale of the businesses and assets to Sunrise Records & Entertainment Limited, whose shareholder is Doug Putman. It will keep 1,487 store and head office employees and stores will continue to trade as HMV, with four continuing to trade as Fopp. Twenty-seven stores have not been acquired, and will be closed with immediate effect, resulting in 455 redundancies.
Putman, CEO of Sunrise Records, said: “We are delighted to acquire the most iconic music and entertainment business in the UK and add nearly 1,500 employees to our growing team. By catering to music and entertainment lovers, we are incredibly excited about the opportunity to engage customers with a diverse range of physical format content, and replicate our success in Canada.
“We know the physical media business is here to stay and we greatly appreciate all the support from the suppliers, landlords, employees and most importantly our customers.”
Just over two years ago, Putman took control of around 80 HMV Canada stores. But while they were rebranded to Sunrise Records, in the UK he will maintain the HMV brand.
“We spent the last little while trying to negotiate a deal that made sense for everybody, keeping as many stores open and as many people employed as possible,” he told Radio 4’s Today. “We’ve been able to come up with a great deal that allows 100 of the stores to continue on.”
He added: “We can confirm we are going to keep HMV, it’s just a fantastic heritage brand coming up shortly to the 100 year anniversary. It’s just so iconic, I feel really lucky to be able to say that we can continue to call it HMV.”
It’s just a fantastic heritage brand coming up shortly to the 100 year anniversary, it’s just so iconic
Putman said they had to take the decision to close 27 stores based on lack of profitability and landlord support.
“We would have loved to [keep them open] but unfortunately as rents continue to grow and go up, it’s just not feasible to keep those stores,” he said. “You can only lose so much money on those stores before you need to make a change. Unfortunately, rents are just very high at this time.
“If we couldn’t see a way forward of making that store break even then it just didn’t make sense to keep it on.”
Asked about the future of the HMV stores, he added: “We think it will be a long time. We took over 80 stores in Canada two-and-a-half years ago and they’re doing strong, doing well, profitable. We see HMV continuing on in the UK for a long time. We believe it’s a chain that’s going to be around, the customers love it, we get amazing support, which is great. I think this is a very long road ahead.”
HMV went into administration for the second time after Christmas. Both ERA and the BPI expressed their hopes it could continue as a vital outlet for physical entertainment.
HMV sold 31% of all physical music in the UK in 2018 – worth around £118.8m – but a projected decline of 17% in physical entertainment sales this year revealed the extent of the challenge ahead.
Will Wright, partner at KPMG and joint administrator said: “We are pleased to confirm this sale which, after a complex process, secures the continued trading of the majority of the business. Our immediate concern is now to support those employees that have unfortunately been made redundant.”
Neil Gostelow, partner at KPMG and joint administrator, added: “We are grateful for the support of all key stakeholders including the suppliers whose support throughout this process has been key in securing this sale.”