Connect with us

Featured

Ashley demands rent holiday to secure HMV rescue deal | Business News

Published

on

The Sports Direct tycoon Mike Ashley is turning the screw on high street landlords by demanding a rent holiday at HMV stores as he negotiates a deal to rescue the music retailer.

Sky News has learnt that Mr Ashley has written to HMV’s landlords – who include some of the biggest names in Britain’s commercial property industry – to seek a six-month rent-free period if he buys the chain.

The letter provides further evidence of Mr Ashley’s uncompromising approach to the owners of the UK’s high street real estate, following a public dispute with many of House of Fraser’s landlords since his purchase of the department store chain last year.

HMV
Image:
HMV collapsed just after Christmas

Mr Ashley tabled a bid to buy HMV out of administration last week, potentially adding another 125 stores to his burgeoning British store portfolio.

In his letter to HMV’s landlords, Mr Ashley is understood to have told landlords that he wants to preserve as many of its shops and jobs as possible, but requires store owners’ co-operation in order to do so.

It was unclear on Friday whether the billionaire will continue to pursue his interest in acquiring HMV without a clear signal from landlords that they will agree to his request.

Sports Direct did not respond to Sky News’ enquiry about the letter.

Mr Ashley’s efforts to secure a rent-free period at HMV echoes his approach elsewhere, and comes amid accelerating declines in the value of many British shopping centres and other physical retail space.

The tycoon, who controls interests in chains including Debenhams, French Connection and Game Group, has become arguably the most powerful figure in the industry.

In the last fortnight he is understood to have held talks with key music and entertainment industry suppliers to HMV about salvaging the UK’s last-remaining national music chain.

HMV
Image:
HMV had 130 stores when it failed

KPMG, which was appointed as administrator to HMV Retail three days after Christmas, is said to have received a handful of offers for the business and wants to agree a deal in the coming days.

The identity of HMV’s other suitors is unclear.

The chain’s collapse into administration for the second time in six years was attributed by its owner, Hilco Capital, to “a tsunami” of factors conspiring against the market for selling CDs and DVDs.

Mr Ashley has bought House of Fraser and Evans Cycles in pre-pack insolvency deals in the last six months.

He is understood to believe that music and other entertainment products could be a valuable addition to parts of his high street empire, including Sports Direct.

The tycoon is already a significant shareholder in Game Digital, the listed chain, and could pursue a move to merge it with HMV if he gains control of the music chain.

Mr Ashley’s interest in buying the business comes just weeks after he warned that November had been the “worst on record” for the retail industry.

Earlier this month, he orchestrated the ousting of Debenhams’ chairman, Sir Ian Cheshire, by opposing his re-election at the department store chain’s annual meeting.

That was widely interpreted as an attempt to destabilise Debenhams following the company’s recent rejection of Mr Ashley’s offer of a £40m short-term loan.

He has been clear, including during an interview before Christmas with Sky News’ Ian King Live, that he believes Debenhams and House of Fraser should ultimately merge.

However, insiders cautioned that the chain’s future remained in the balance, with no guarantee of a viable offer for the business.

If a rescue deal to salvage HMV from administration is to be struck, some form of financial support from leading names in the recorded music and film industries is likely to be needed.

The disappearance of the last major specialist music retailer on the high street is a fate that major ‎record labels have been keen to avert for years.

KPMG declined to comment on the status of the administration process.

Advertisement Find your dream job

Trending