Canadian retailer Sunrise Records is pulling stricken retailer HMV out of bankruptcy in a deal that will safeguard some 1,500 jobs.
However, administrator KPMG says 27 stores will close immediately, resulting in a loss of 455 jobs.
Sunrise Records will acquire 100 stores across the United Kingdom, and 1,487 stores and head office employees will transfer as part of the transaction.
The stores will continue to operate as HMV, with four stores continuing under the Fopp banner.
“We are delighted to acquire the most iconic music and entertainment business in the UK,” Sunrise Records chief executive Doug Putman said in a statement.
“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.”
The move comes amid extreme pressure on physical retailers as customers buy more online. Poundworld, Toys’R’Us and Maplin went under last year, and major retailers like Debenhams are closing stores.
Management professor Christian Stadler of Warwick Business School says that while it is “excellent” news for those who prefer to buy their music from a shop, rather than streaming or online, it would be foolish to think there is “scope for considerable growth. HMV’s new owners need to focus on carving out some sort of niche to ensure a future for the company.”
— With files from The Associated Press
The Canadian Press