HMV offloads its Canadian shops to a U.K. restructuring firm—is it time to start a death watch?
As the last remnants of the Blockbuster Canada empire close their doors—with the sad remains of their inventory on sale for rock-bottom prices (anybody looking for cheap copies of The Last Airbender, go now)—it’s starting look like the video rental store is the first in an emerging trend of industries getting rolled over by this new thing known as the Internet. Case in point: news today that HMV Canada sold its 121-store business to Hilco UK, a company that specializes in “restructuring.”
The London Telegraph has the story:
Simon Fox, chief executive of HMV Group, said: “The Board has fully explored the options available to it for HMV Canada, and believes that a sale to Hilco is the correct decision for the business at this time, whilst reducing the operating leverage in the continuing Group.”
The announcement confirms a report in The Sunday Telegraph, which said HMV’s suppliers were informed last week that it had agreed a sale of the Canadian business to the restructuring firm.
There are a number of rather important differences between Blockbuster and HMV—namely, that Blockbuster’s Canadian stores were sold to pay off the U.S. parent company’s bad debts, and that HMV’s financial situation doesn’t seem to be nearly as dire. Still, we can’t see how movie and music shops can keep their business model working long past 2011: the idea of going somewhere to buy (with real money) a shiny plastic disc for music and movies is almost quaint (not to mention the idea of actually paying, with real money, for music and movies).
But perhaps we’ve got it all wrong. Maybe HMV can withstand the one-two punch of iTunes and piracy. Of course, if not, they’ll have more than enough company in the retail afterlife.
• HMV Canada sold for $3.2 million [Toronto Sun]
• British restructuring specialist to buy, fund HMV Canada [Canadian Business]
• HMV confirms sale of stores in Canada for £2m [Telegraph]
Images: HMV—Brian Chow; Deathwatch—Wikipedia
3 thoughts on “HMV offloads its Canadian shops to a U.K. restructuring firm—is it time to start a death watch?”
The HMV in the Yonge Eglinton Centre will be closing at the end of the month. There’s one down.
When hmv came to Canada in 1986, it invested three or four times as much cash in inventory and remodeling stores, as their competitors. It had two results: (1) knocked their competition off balance, and (2) serious operating losses at hmv for the first several years of its existence. When their competitors disappeared one after the other, hmv started showing decent profits, but by no means exceptional profits because their operating costs remained high. And with the losses they suffered during the last several years, it is doubtful hmv had any net profit over the period of its existence in Canada.
Capitalism at its best!!!
hopefully the Candaian people can have some faith in the restructuring of HMV shops. If a restructuring is done correctly it will help set the company on a path of prosperity.
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