Canadian music retail chain owner CEO Doug Putman has purchased the assets and name of HMV UK in a deal worth more than $10-million.
The maverick music merchandiser, who operate the privately held Sunrise Records chain of 84 suburban mall stores, spoke with FYI by phone from London yesterday, revealing that the deal to acquire the UK chain is self-financed by his company and will likely give him ownership in 110 stores across the UK.
With at least two others in the bidding, Putman said Tuesday that his winning bid was in having all the deal components firmly in place.
“(Administrator KPMG) just realized the suppliers and landlords supported me and I had the money ready. It’s as simple as that really– and we are willing to keep a lot more stores open than anyone else. We were willing to take it as a whole package, which made it a lot easier for them to go with us.”
He doesn’t doubt he has his work cut out for him. “From now we work on trying to get everything up to par. Obviously, there’s a lot of stock missing in stores, so we will be working on making sure they are fully stocked (and) signing all the leases. We publicly said it was 100 stores, but we think it is closer to 110 when all is said and done.”
He adds that the plan is to get deeper into vinyl. “HMV was not quite as deep in vinyl (as Sunrise stores), but the plan is to get there.”
Last year the Sunrise chain sold more than 600,000 LPs worth an estimated $15M in retail dollars. The Canadian chain also sells DVDs, CDs, games, electronics (including headphones and turntables), apparel and pop merchandise. It is Canada's only national music retail chain, the single biggest purveyor of music on CDs and vinyl and continues to be a significant profit centre for record companies. And while many pooh-pooh physical sales, saying that music streaming is the dominant force in music today, consumers still forked out an estimated $60M purchasing new LPs and CDs last year.
In 2014, Putman bought the Southern Ontario-based Sunrise Records chain from the Perlman brothers (Malcolm and Roy) and three years later acquired the leases on 70 HMV Canada outlets after the UK chain went into receivership here.
Here is the official press release
LONDON, UK – The joint administrators of HMV have confirmed the sale of the businesses and assets to Sunrise Records & Entertainment Limited, whose shareholder is Doug Putman, owner of Sunrise Records in Canada.
Sunrise Records & Entertainment Limited will acquire 100 stores across the UK, and 1,487 store and head office employees will transfer as part of the transaction. The stores will continue to trade as HMV, with four stores continuing to trade as ‘Fopp’.
The administrators will retain a further 122 employees at warehouse functions to assist them in winding down operations. Unfortunately, 27 stores have not been acquired and will be closed with immediate effect, resulting in 455 redundancies.
Will Wright, Neil Gostelow and David Pike from KPMG’s Restructuring practice were appointed joint administrators on 28 December 2018.
Will Wright, a partner at KPMG and joint administrator, said:
“We are pleased to confirm this sale which, after a complex process, secures the continued trading of the majority of the business. Our immediate concern is now to support those employees that have unfortunately been made redundant.”
Neil Gostelow, partner at KPMG and joint administrator, added:
“We are grateful for the support of all key stakeholders including the suppliers whose support throughout this process has been key in securing this sale.”
Doug Putman, CEO of Sunrise Records, commented:
“We are delighted to acquire the most iconic music and entertainment business in the UK and add nearly 1,500 employees to our growing team. By catering to music and entertainment lovers, we are incredibly excited about the opportunity to engage customers with a diverse range of physical format content, and replicate our success in Canada.
“We know the physical media business is here to stay and we greatly appreciate all the support from the suppliers, landlords, employees and most importantly our customers.”
About Sunrise Records and Doug Putman
Sunrise Records is Canada’s entertainment destination. Doug Putman bought the retail chain in 2014. Sunrise Records was founded in 1977 and at time of purchase, had five stores. Expansion began in 2017 and today, Sunrise is 84 stores strong. Doug Putman also owns Everest Toys, the largest toys and games distribution company in North America.