HMV Canada in Receivership; All Stores To Close by April 30 (Update)
The country's biggest music retail chain is shuttering 100-plus stores.
HMV Canada Inc., the nation's biggest music retail chain with 100-plus locations, will close all stores by April 30. Ontario Superior Court of Justice approved an application by HUK 10 Limited London, part of Hilco Global, HMV's parent, to put the company into receivership.
The hearing was held today (Jan. 27) and heard before Justice Morawetz, the media department of the court told Billboard in an email
A request for comment from Hilco Capital investment director Chris Emmott, a key player in the cross-border restructuring of the company, was not returned at press time. HMV Canada president Nick Williams is scheduled for an interview with Billboard tomorrow (Jan. 28)
According to the Canadian Press, senior Justice Geoffrey B. Morawetz appointed Gordon Brothers Canada ULC and Merchant Retail Solutions ULC as the agent to sell HMV's merchandise.
A Globe and Mail piece, published prior to the hearing, quotes Emmott, also a director at HUK 10, from an affidavit: "Unfortunately, the debtor has been unable to reach an agreement with the major suppliers on mutually beneficial terms that would allow the debtor to address its immediate cash flow needs."
While the company opened a new location at Tsawwassen Mills shopping mall in British Columba as recently as October, and signed a partnership with Ticketmaster last March, sources in the Canadian industry tell Billboard that the major labels are having trouble getting paid, and one has stopped selling to HMV altogether. Billboard reached out to the three major label groups for confirmation with Warner Music declining to comment and UMG and Sony Music not responding at press time.
Hilco UK acquired HMV Canada in 2011 from the UK's HMV Group plc, for a total of GPB £2.05 million ($3.3 million CAD at the time). It provided $25 million CAD initially to help with restructuring (the retailer expanded into more DVDs, plus collectibles, clothing and headphones) but court documents show it now owes $40 million and has not made a payment since November 2014. (Hilco bought the rest of of HMV in 2013.)
Annual sales slipped to $193-million at the end of last year from $266 million in 2012, they say. "These financial difficulties, combined with the further decrease in the debtor's sales expected over the coming years, means the current situation is not sustainable," Emmott said.