Future of Work

Sports Direct founder Mike Ashley has placed a bid to buy music chain HMV.

HMV collapsed last month, its second administration in six years, risking 2,200 jobs at 125 stores.

Sports Direct could not be reached for comment and administrators KPMG also declined to comment. Mr Ashley owns more than 60% of Sports Direct, and through it he has bought retailers including the House of Fraser department store chain and Evans Cycles.

His company also owns stakes in French Connection and Debenhams.

HMV owner Hilco, which took the company out of its first administration in 2013, has blamed a “tsunami” of retail challenges for the latest collapse, including business rate levels and the increasing use of streaming services to deliver music and movies.

When the chain fell into administration last month, Paul McGowan, executive chairman of HMV and Hilco, said HMV sold 31% of all physical music in the UK in 2018 and 23% of all DVDs, with its market share growing month by month throughout the year. However, he added that the industry consensus was that the market would fall by another 17% during 2019.

HMV’s stores are continuing to trade while negotiations are held with major suppliers and bids are considered.

Besides Mr Ashley’s bid, KPMG has said it has received “a number of offers on various bases. We now need to evaluate these further over the coming days,” it added.

After establishing Sports Direct in 1982, Mr Ashley built his business by buying up well-known names such as Dunlop, Slazenger, outdoor gear specialist Karrimor and the boxing brand Lonsdale.

After many years of growth and the demise of rivals such as JJB Sports, it is now the UK’s largest sportswear retailer, with more than 400 stores including Lillywhites in London’s Piccadilly.

Sports Direct also owns a stake in Game Digital, which Mr Ashley could merge with HMV if he is successful, according to Sky News, who first reported Mr Ashley’s interest in buying HMV.

KPMG set a deadline of last Tuesday for bids for the stores, but has not named any bidders. There is said to be no deadline for a decision.

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