HMV has been sold to Canadian music company Sunrise Records & Entertainment Limited after owner Doug Putman put in a rescue bid to save the retailer, with the books side of the business set to continue.
Sunrise Records & Entertainment Limited will acquire 100 stores across the UK, and 1,487 store and head office employees will transfer as part of the transaction. The stores will continue to trade as HMV, with four stores continuing to trade as Fopp.
The administrators will retain a further 122 employees at warehouse functions to assist them in winding down operations. 27 stores have not been acquired, and will be closed with immediate effect, resulting in 455 redundancies.
Administrators from KPMG were appointed over Christmas to help the firm, which employs approximately 2,000 permanent staff, find a buyer or wind up the business.
Last month administrators said they were in “ongoing” talks with book suppliers to HMV with book sales representing approximately 2% of HMV’s £254m revenues in the year to date. KPMG told The Bookseller the plan is to continue maintaining the books side of the business, and Putman is speaking to suppliers to this effect.
Putman bought HMV’s Canadian business in 2017 and has been president of Sunrise Records since 2014. Sunrise was founded in 1977 and at time of purchase, had five stores. Expansion began in 2017 and today, Sunrise has 84 stores. Putman also owns Everest Toys, the largest toys and games distribution company in North America. The Canadian businessman put in his bid after Sports Direct founder Mike Ashley held talks with HMV’s suppliers about a rescue deal earlier this month.
The c.e.o. 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.”
Partner at KPMG and joint administrator Will Wright 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.”
HMV previously fell into administration in April 2013, when it was rescued by restructuring firm Hilco in a £50m deal.
Hilco’s Paul McGowan said: “As we have seen already in Canada, HMV is in good hands with Doug Putman and Sunrise Records and we wish him and all the HMV team continued success into the future.”