TORONTO (CelebrityAccess MediaWire) — A UK-based buyout firm has agreed to purchase HMV's Canadian retail operation for from HMV's UK parent, HMV Group for the fire sale price of $3.2 million.
Hilco UK has pledged to provide HMV Canada with an infusion of working capital of up to $25 million to fund continued operations. Hilco has also secured the support of every major supplier in the sector in Canada for its plans to restructure the business.
Hilco UK specializes in restructuring flagging commercial and retail operations and has worked with other retailers such as Borders UK and Woolworths.
"Our financial and merchandise planning teams will be assisting existing management to optimize the business. The support of the entire industry shows how important it is to extend the residual market, despite the switch to digital," said Hilco CEO Paul McGowan in a statement.
Opening their first outlet in 1986, HMV Canada has grown to become the nation's only national specialty retailer. They currently operate 121 locations across Canada, employing approximately 2,000 people and generating $360m in revenue in 2010. However, as with many music retailers, HMV Canada has been struggling against declining physical sales in the face of the encroachment of digital music.
In a recent shift, HMV Canada is increasingly focusing on additional revenue streams such as from video games and related merchandise as well as an expanded digital platform with streamed content. – Ian Courtney