Sports Direct founder Mike Ashley in talks to buy music chain HMV

Sports Direct founder Mike Ashley has placed a bid to buy music chain HMV three weeks after the company fell into administration.

HMV Source: Bloomberg

Mr Ashley is in talks to save the music retailer from administration after it collapsed last month putting thousands of jobs at risk.

Mr Ashley who owns more than 60% of Sports Direct, also owns the House of Fraser department store chain.

HMV said last month, a worsening market for entertainment CDs and DVDs was to blame for the move, with an increasing rise of streaming services dominating the market.

Mr Ashley lodged a formal offer to buy HMV before the January 15 deadline, along with other unknown bidders, however, it was unclear whether the bid was made through Sports Direct international or another corporate vehicle.

HMV falls into administration for the second time.

HMV has fallen into its second administration in six years, with the first in 2013, saved by owner Hilco.

When the chain fell into administration last month, Paul McGowan its executive chairman said HMV sold 31% of all physical music in the UK in 2018 and 23% of all DVDs.
Mr McGowan said the industry was predicted to fall by another 17% during 2019.

Analysts say Mr Ashley’s bid could be a good save for the company, as it comes just one month after the music company fell into its second administration.

KMPG to make decision in coming days

Joint administrator and partner, KPMG were called in to seek a buyer for the business, with all 125 HMV stores to remain open while negotiations take place.

‘The company has suffered from the ongoing wave of digital disruption sweeping across the entertainment industry’, said KPMG.
KPMG also said it has received "a number of offers on various bases."

"We now need to evaluate these further over the coming days," KMPG said.

HMV first opened on London's Oxford Street by English composer Edward Elgar in 1921 and made famous by the image of the "dog and trumpet".

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