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HMV receives aid from entertainment giants

BusinessNews
, 21 Jan 2013News
HMV receives aid from entertainment giants

Entertainment juggernauts Sony, Warner and Universal are lending HMV a helping hand, the Sunday Times has reported. The Hollywood giants plan to ply prospective buyers with generous credit terms, as well as price reductions on their CDs and DVDs.

The policy is motivated by a desire to maintain HMV’s high street presence to help curtail mounting pressures to cut prices on their products from supermarkets and competing online stores.

The high street chain remains optimistic about its chances of finding a new buyer, as it believes its 92 years’ worth of heritage has generated a lot of goodwill within the business sector and among consumers.

“We remain convinced we can find a successful business outcome. We want to make sure it remains on the high street,” said HMV chief executive Trevor Moore.   

“We know our customers feel the same way.”

Such faith is not unwarranted, as HMV has managed to attract of 50 possible buyers. Formerly under-the-cosh vendor GAME has recently shown interest in taking 40-45 stores off HMV’s hands, out of its 223 nationwide stores.  

However, Hilco is being tipped as the frontrunner for an eventual purchase. The restructuring firm already bought the Canadian arm of the retail chain in 2011, but will have to beat off competition from private equity firms Endless and Better Capital if it wants to add the UK branch to its HMV collection.

In related news, HMV will be reinstating its gift voucher policy on 22 January in response to complaints from the public.The Deloitte-administered retailer followed the same policy used by the accounting firms former client Comet to discontinue honouring vouchers during its period of administration. This incurred the public's wrath with politicians even jumping into the fray after the calculation of the vouchers' cumulative worth, estimated to be around £100 million, drew accusations of theft.

"A gift voucher should be as good as a Bankers Draft, i.e. a consumer should know that they will either be able to redeem the gift voucher, or get their money back, and there is absolutely no reason why companies shouldn't keep monies raised from gift cards or vouchers in a separate account," said Tory backbencher Sir Tony Baldry in an open letter to the Department for Business, Innovation and Skills.

Image Credit: Flickr (Andres Rueda)

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