Hilco takes control of HMV
By Rebecca Burn-Callander Tuesday, 22 January 2013
The music plays on, but Nipper has a new master now. Restructuring specialist Hilco has bought HMV's debt, effectively assuming control of the high street retailer.
Salvation is at hand for HMV’s 223 stores and 4,000 staff. Hilco, the Canadian firm that already owns HMV Canada, has bought the beleaguered retailer’s debt from lenders Lloyds and Royal Bank of Scotland.
It’s a quick and painless way to assume control of HMV, which went into administration last week. And word has it that Hilco got a cracking price on the deal, paying under the odds for HMV’s £176m debt mountain.
Hilco acquired HMV Canada from the HMV parent company back in 2011 for £2m. It was these existing ties with suppliers and Hilco’s inside knowledge of the industry that made it the buyer of choice for the likes of Sony and Universal Music. Interestingly, Deloitte had already appointed Hilco to advise on finding a buyer because of its 'inside knowledge'.
In theory, now that Hilco is to control the HMV brand in the UK and Canada, it will be able to secure more favourable credit terms from said suppliers – and it’s always cheaper to buy in bulk, after all. So it seems that HMV has escaped the death knell. Let’s hope the new business owner manages to strike the right note with consumers in 2013.
Read the full story of the decline and fall of HMV here.