Canadian music mogul bids to save HMV
New bidder leads chase – and could save up to 90 stores
UP TO 90 HMV stores could be saved after a Canadian music mogul entered a battle with billionaire Mike Ashley to seize control of the troubled retailer.
HMV collapsed days after Christmas, putting its 125 UK stores at risk of closure as administrators KPMG sought a buyer. The Mail on Sunday understands that Doug Putman, the owner of Canadian music retailer Sunrise Records, flew into London this weekend to try to seal a deal.
He will go head to head with Sports Direct and Newcastle United FC owner Mike Ashley, as well as a group of HMV managers.
Mr Ashley, the self-styled ‘saviour of the high street’, wants to expand his retail empire and was previously thought to be the frontrunner in the HMV bidding.
But City sources said Mr Putman’s late entry had put him in pole position.
The Canadian is an avid music fan who runs his own record shops in Canada. Sources said he wanted to save as many as 90 shops.
It would deliver a reprieve for HMV, which has struggled to compete with the rise of Amazon and streaming services such as Spotify and Netflix.
CANADIAN music mogul Doug Putman has made an audacious swoop to seize control of troubled retailer HMV from under the nose of Newcastle United Football Club owner and billionaire Mike Ashley.
In a move that could save twothirds of HMV’s stores from closure, Putman – t he owner of Canadian music business Sunrise Records – is understood to have arrived in London with his lawyers to push through a bid for one of Britain’s most recognised shops.
Ashley’s interest emerged two weeks ago. But The Mail on Sunday has learnt the intervention of Putman has catapulted him into pole position in recent days.
It would mean a rescue for the chain which collapsed into administration just days after Christmas. HMV is being run by administrators at KPMG who have been speaking to potential buyers. Sources said Putman’s plan could safeguard up to 90 of the chain’s 125 UK stores.
The Canadian is a self-confessed music lover in his mid-30s. He has been president at Sunrise Records since 2014 and grown i t from around a dozen stores to more than 80 after he bought HMV’s Canadian business in 2017.
‘ Vinyl albums are a beautiful thing,’ he told an interviewer shortly after he bought the HMV Canada chain. ‘Having them, storing them and getting to view them whenever you want. There is something really nice about that,’ said Putman, whose family also owns Ontario-based toy manufacturer and distributor Everest Toys.
An acquisition by Putman of HMV’s UK chain, which sells DVDs as well as CDs and vinyl records, would infuriate controversial sports tycoon Ashley. The 54-yearold wants to buy HMV to put into his House of Fraser department store business which he bought last summer after its owners were forced to call in receivers.
He has been linked with a number of other acquisitions, including cake shop Patisserie Valerie, and on Fri day bought upholstery retailer Sofa.com. In November, Ashley released a statement to the London Stock Exchange in which he ‘vowed to save the struggling British high street’, adding that he believed ‘politicians and landlords should be doing more’.
But the arrival of Putman into negotiations for HMV means there are three bidders for the chain, including a proposal put forward by its current management. The management team are understood to have been in talks with suppliers including major Hollywood film studios. They are believed to have won the support of ‘90 per cent’ of existing suppliers who have continued to ship products to the business in recent weeks and signalled their willingness to provide ongoing support.
Sources said Putman could team up with management to seal a deal as soon as this weekend, but there was no confirmation last night.
Any successful bidder is also l i kely to need to engage with restructuring firm Hilco, which previously ran HMV in Canada and in the UK. Hilco still owns the rights to the HMV brand name.
Vinyl sales at HMV surged 27 per cent last year. But it also relies heavily on DVDs, which account for about 60 per cent of its sales while consumers watch more streaming TV services.
It is understood that film producers are increasingly appreciative of back catalogue DVD sales because selling older titles, where the original cost of the film has long since been paid off, can be lucrative despite rising competition from Netflix and Amazon Prime.
HMV has faced more than two decades of relentless competition that makes its survival even to this point little short of a miracle.
It has been under intense pressure from US online giant Amazon throughout that time and more recently from streaming music sites, such as Spotify.
Putman and others still believe there is a future for high street stores as collectors buy more physical music products and snap up special editions. But pressure on retailers is unlikely to ease.
The end of next month will bring a sequence of events that could undermine efforts to revitalise some chains. On March 25, high street stores will need to stump up for quarterly rent bills. Shortly after, businesses will face the uncertainty of leaving the European Union on March 29.
Then, the following week, ‘bricks and mortar’ retailers face a huge hike in business rates – estimated by real estate adviser Altus Group at an additional £128 million a year.