Deal valued at $3 million.
Sydney-based entertainment and lingerie company Brazin Ltd. has bought HMV Australia Ltd. from its U.K. parent for $4 million Australian ($3.08 million).
The deal is effective Oct. 2.
HMV has 32 stores in Australia. According to label estimates, it has a 9.5% market share, with annual sales of $109 million Australian ($84 million). Brazin will retain the HMV name for the time being, according to Brazin chief executive Greg Milne.
Alan Giles, London based chief executive, commented: "This simplifies our operations in HMV Asia Pacific, and enables the Group to focus on its larger businesses."
Label executives reacted to the news with apprehension. The move gives Brazin ownership of three of Australia's four music retail chains, and close to 43% of the music retail market.
Brazin's nearest competitor now is JB Hi-Fi, a fast growing electronics and budget CD/DVD chain which has about 15% of the market.
"They've always been difficult and tough to negotiate with, and this certainly gives them more of a clout," says one label managing director on condition of anonymity.
Brazin owns market leader Sanity Entertainment. In October 2001, it bought the Australian rights to license the Virgin Music name, running 12 Virgin stores and struggling to differentiate the brand from the Sanity stores.
In July 2004, Brazin solved the problem by buying the music departments of the Myer department stores' 62 outlets and rebranding them as Virgin stores, making them more "family" orientated than the "street edge" Sanity stores.
Brazin plans to manage its three brands together. Milne said in a statement that the HMV stores would "enable us to balance and optimize the total Brazin Entertainment store network to provide improved performance for the group as a whole.
HMV's commercial director, Peter Smith, will now work with a Sanity/Virgin team on integrating the two businesses.