HMV bought by Canadian mogul after battle with Mike Ashley

A Canadian music entrepreneur on Tuesday beat Sports Direct tycoon Mike Ashley to buy the collapsed music chain HMV from administration after marathon all-night negotiations.

Doug Putman, who owns Canada’s Sunrise Records, bought 100 shops from administrator KPMG, saving 1,600 jobs. However, 27 stores will be shut on Tuesday, with 455 jobs to go.

The 34-year-old pipped Ashley to the deal after HMV became a takeover target for the acquisitive billionaire. But Putman has his work cut out for him, as demand for CDs and DVDs continues to fall amid the rise in streaming.

“HMV survives to live another day. Alas, one has to question whether it has a big opportunity under the new owner or whether it is still living on borrowed time,” said AJ Bell’s Russ Mould. “It is essentially relying upon the current revival in vinyl sales to keep it alive.”

Putman, a self-proclaimed lover of vinyl records, told the BBC: “There’s no doubt that online is a big part of overall retail sales. But people like to come into a store, have an experience, talk with someone who understands music, loves music, loves video and entertainment.

“If you think online is the only future I don’t think that is the case. There is so much you get from coming into a store that you can’t get online.”

The Canadian bought retail chain Sunrise Records in 2014, when it had five stores. It now has 84. The bulk of that growth came in 2017 when he bought 70 of HMV’s stores in Canada after the chain went bust there.

He said those stores are now profitable. He will be looking to sell more vinyl records in response to customer demand.

But Global Data retail analyst Patrick O’Brien added: “HMV will need to do more than just increase music and video market share.”

HMV went into administration in December for the second time in six years under private equity owner Hilco. The price of today’s deal was not disclosed. The stores will continue to sell music and films under the HMV name, including four Fopp sites. KPMG will tell staff on Tuesday if their store is closing before it makes public the list of stores that will be lost.