Thursday , June 17 2021

Ashley wants to take a break to secure a rescue deal with HMV Business News

Sports Direct Mike Ashley turns the landlords' screws on the main streets, wanting to take a break in HMV's stores by negotiating a deal to save the music retailer.

Sky News has learned that Mr. Ashley has written to HMV landlords – who include some of the biggest names in the UK – to seek a six-month period without rent if they buy the chain.

The letter provides further evidence of Mr Ashley's uncompromising approach to UK property owners following a public dispute with many House of Fraser landlords after purchasing the department store chain last year.

HMV collapsed right after Christmas

Mr. Ashley submitted an offer to purchase HMV outside the administration last week, potentially adding another 125 stores to the expanding UK portfolio.

In his letter to the landlords of HMV, Mr. Ashley realized he had told landlords he wanted to keep as many of his stores and jobs as possible, but required store owners to cooperate to do so.

It was not clear on Friday whether the billionaire would continue to seek HMV without a clear signal from the landowners that they would agree to his request.

Sports Direct did not respond to Sky News's request for the letter.

Mr Ashley's efforts to ensure an indefinite period in HMV reiterates his approach elsewhere, and comes amid the accelerated depreciation of many British shopping centers and other physical retail space.

The magnet who controls the interests of the chains, including Debenhams, the French Connection and Game Group, has probably become the most powerful figure in the industry.

Over the past two weeks, it has been understood that he has held talks with key music and entertainment providers for HMV to save the last remaining national music chain in the UK.

HMV had 130 stores when it failed

KPMG, who was appointed HMV Retail Administrator three days after Christmas, is said to have received a handful of offers for business and wants to reach an agreement in the coming days.

The identity of other HMV candidates is unclear.

The collapse of the chain in the administration for the second time in six years was attributed by its owner, Hilco Capital, to a tsunami of factors that have allied themselves against the market for the sale of CDs and DVDs.

Over the past six months, Mr. Ashley has purchased House of Fraser and Evans Cycles in insolvency before bankruptcy.

Of course, he believes that music and other entertainment products can be a valuable addition to parts of his empire, including Sports Direct.

The magician is already a significant shareholder in Game Digital, the listed chain, and may seek to merge it with HMV if he gains control of the music chain.

Ashley's interest in buying the business came just weeks after he warned that November was the "worst record" for retail.

Earlier this month, he arranged for the removal of Debenhams' chairman, Sir Ian Cheshcher, opposed to his re-election at the annual meeting of the department store chain.

This was widely interpreted as an attempt to destabilize Debenhams after the recent rejection of Mr Ashley's proposal for a £ 40m short-term loan.

He is also aware, including during an interview before Christmas with Ian King Live by Sky News that he believes that Debenhams and House of Fraser should ultimately merge.

But insiders have warned that the future of the chain remains in balance, with no guarantee of a viable offer for business.

If a rescue deal is to be concluded to rescue HMV from the administration, some form of financial support from leading names in the music and film industry is likely to be needed.

The disappearance of the last major music salesman on the main street is a fate that the big record companies have wanted to repel for years.

KPMG declined to comment on the state of the administrative process.

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