Hilco today (5 April) confirmed it is to acquire HMV’s 141 stores from administrator Deloitte in a deal said to be worth £50m.
In a statement, Hilco said “the iconic entertainment retailer” will hand back the space given over to “tablets and other devices” to accommodate an “enhanced music and visual range”. Headphones will continue to be a prominent part of its music offer, however.
HMV expanded its technology offer in its then 250 stores in 2011 when about a quarter of its retail space was dedicated to electronic devices and accessories. It even opened a tech-only store in the City of London.
The decision was made in the wake of declining physical music and film sales. The retailer has struggled to compete with online rivals such as Amazon and Apple’s iTunes and it is widely seen to have been slow in exploiting the popularity of downloading.
Sales of CDs, DVDs, Blu-rays and video games fell by 17.6 per cent in 2012, according to the Entertainment Retailers Association. By contrast, sales of downloaded music, films and games rose 11.4 per cent.
Hilco will be looking to replicate the success of HMV in Canada. The firm bought the Canadian unit in 2011, returning it to profitability in 2012 and growing sales in a declining market.
In a statement, Hilco’s chief executive Paul McGowan, who will become HMV’s chairman, acknowledged the “additional challenges” facing the retailer in the UK but insisted affection for the HMV brand improved the chances of a “successful” future.
McGowan, former chief executive of Harvey’s owner Steinhoff Group Ian Topping and Hilco investment director Henry Foster will lead the business.
A spokeswoman for Hilco told Marketing Week it was “too early to say” if a director-level marketer would be brought in. Marketing director Mark Hodgkinson left in February.