Mike Ashley eyes HMV takeover

HMV Mike Ashley
// Mike Ashley has expressed interest in buying HMV out of administration
// HMV called in administrators just before the new year
// Online services such as Netflix, Amazon Prime and Spotify among reasons for HMV failure

Mike Ashley has reportedly been in talks with HMV’s suppliers in hopes of acquiring the collapsed music and entertainment chain, according to Sky News.

HMV called in administrators from KPMG on December 28 for the second time in six years, plunging the future of 125 stores and 2200 jobs into uncertainty.

HMV blamed a “tsunami” of challenges for its failure such as rising business rates, dwindling footfall and a rapidly changing physical media market due to the increasing popularity of Netflix, Amazon Prime and Spotify.

Ashley’s expression of interest in buying HMV out of administration comes he succeeded in similar types of acquisitions with House of Fraser and Evans Cycles last year.

HMV administrators have already revealed that a number of “proposals” have been put forward for the embattled entertainment retailer.

Physical sales of DVDs and CDs, which account for a large portion of HMV’s overall income, are predicted to fall by 17 per cent this year, following a dramatic decline in recent years due to the rising prominence of streaming services.

Turnaround specialist firm Hilco purchased HMV out of administration in 2013 and remains the retailer’s largest creditor.

According to The Sunday Times, Hilco lent HMV £56.6 million in working capital during its ownership, alongside a further £4.5 million over the last few months which Hilco said it was “highly unlikely” to recover in full.

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