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Sports Direct CEO Mike Ashley in Talks to Buy HMV After Music Retailer Goes Bust

UK billionaire and retail tycoon Mike Ashley plans to buy British music retailer HMV just weeks after the firm went into administration a second time. Roughly 2,200 jobs were put at risk after the company went bust from an "extremely weak Christmas footfall" and declining CD and DVD sales.
Sputnik

Mr. Ashley, who owns Sports Direct and Newcastle United, bought out struggling collapsed retailer House of Fraser for £90m in August of last year, as well as Evans Cycles in October.

"HMV has clearly not been insulated from the general malaise of the UK high street and has suffered the same challenges with business rates and other government-centric policies which have led to increased fixed costs in the business," Paul McGowan, chair of HMV's owner Hilco said in December.

Mr. McGowan also said that HMV's market share grew month-to-month in 2018, but that industry forecasts predicted a 17 percent drop in revenues in 2019, with HMV ceasing to trade.

British Retail Sector Collapse Ongoing as HMV in Administration Again
KPMG was commissioned to find a buyer for HMV, with all 125 HMV stores to continue operating until negotiations with suppliers conclude, allowing the company to continue trading. The professional services company and member of the UK's "Big Four" firms – alongside Deloitte, EY, and Pricewatercoopers – had received offers "on a number of bases", with Mr Ashley entering the "bidding process ahead of the 15 January deadline," according to Sky News.

Will Wright, KPMG Partner and joint administrator, said in December that while HMV continued to outperform declining DVD and CD markets, "the company has suffered from the on-going wave of digital disruption sweeping across the entertainment industry… in addition to the ongoing pressures facing many high street retailers, including weakening consumer confidence, rising costs and business rates pressures."

Alex Neill, managing director of home products and services, said in December press release: "It's a worrying time for everyone when a company goes into administration but for customers, it's important to remember that your consumer rights may be affected."

Mr. Neill also advised consumers to know their rights, including spending vouchers before HMV ceases trading or filing credit card disputes under Section 75 of the Consumer Credit Act.

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