ONE of Glasgow’s most-enduring music shops has failed to escape the cull stemming from the deal which rescued HMV from administration.
Fopp in the west end’s Byres Road is one of three stores in Scotland which has closed after the business and assets of HMV were acquired by Canadian firm Sunrise Records & Entertainment.
The HMV stores in Ayr and at Braehead shopping centre are also among the 27 stores which have shut. Administrators at KMPG, which were appointed shortly after Christmas, said the closures will result in the loss of 455 jobs.
Sunrise, which is owned by Canadian entrepreneur Doug Putman, will acquire 100 of HMV’s stores out of administration, securing 1,487 jobs in the process.
Ten of those stores are in Scotland, including eight outlets trading as HMV and two as Fopp – on Glasgow’s Union Street branch and Rose Street in Edinburgh. The HMV stores to survive are in Aberdeen, Dundee, East Kilbride, Inverness, Livingston, Stirling, Glasgow’s Argyle Street and Edinburgh’s Ocean Terminal shopping centre.
Only five stores in the once-mighty Fopp chain, which boasted more than 100 outlets before its collapse and acquisition by HMV in 2007, remain open.
READ MORE: Administrators receive offers for HMV
A statement on the Fopp Twitter account confirmed the news, stating: “Thank you for all of your kind words on Twitter over the past few weeks, sorry we have been a bit quiet. Unfortunately we’ve had to say goodbye to some amazing people today. Thank you for your dedication & passion over the years. We will miss you.”
HMV had been in administration since late December, when it succumbed to a perfect storm of soaring costs, intense competition from online retailers and weak consumer confidence.
Its failure cast serious doubt for a second time on the future of a company which can trace its history back to 1921, when the first store to trade beneath its now famous His Master’s Voice sign opened on London’s Oxford Street.
HMV flourished as record and later cassette and compact disc (CD) sales boomed throughout the 1960s, ‘70s, ‘80s and ‘90s. But it began to struggle more recently as traditional retailers faced the threat of online competition, and downloads and streaming began to replace sales of physical products. It went into administration for the first time in January 2013, as the growth of digital sales, along with factors such as rising property costs, took their toll. HMV employed more than 4,100 staff across the UK at the time.
The chain was then acquired by Hilco Capital for £50 million in April 2013, with the restructuring specialist taking on 141 of the firm’s then 223 stores. The Hilco deal safeguarded around 2,300 jobs.
READ MORE: From Elgar to Fortnite, the high street stalwart’s highs and lows
The music chain went into administration for a second time in late December, with insolvency specialists KPMG citing the effects of the “ongoing wave of digital disruption sweeping across the entertainment industry”. Weak consumer confidence and increasing costs, including rising business rates, were also highlighted.
The failure capped a brutal year for the UK high street, which saw Toys R Us go out of business, House of Fraser enter administration, and big-players such as Mothercare and New Look utilise insolvency procedures called Company Voluntary Arrangements (CVAs) to close stores and reduce rents. Debenhams also unveiled plans to shut 50 stores in October to slash costs amid weak trading.
READ MORE: Fopp: a music empire that began in stall forced to shut
HMV stores had continued to trade under administration in recent weeks, with KMPG reporting in mid-January that it had received several offers for the retailer.
Sunrise, which was founded in 1977 and has 84 stores, emerged the victor, in doing so denying Mike Ashley the chance to add another big retail name to his burgeoning high-street portfolio.
Mr Putman, who also owns Everest Toys, the largest toy and games distribution company in North America, said: “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.”
The administrators said 122 employees will be retained in warehouse roles to assist in winding down operations.
Will Wright, 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.”
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