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HMV administrators sell G-A-Y venue to founder

Administrators to HMV have sold the company’s entertainment venue G-A-Y to its founder Jeremy Joseph

04 Feb 2013 Accountancy Age

By Rachael Singh

An HMV shop

ADMINISTRATORS TO HMV have sold entertainment venue G-A-Y to its founder.

G-A-Y is the last of the collapsed retailer's entertainment venues on its books, after HMV sold the others in 2012. G-A-Y includes the G-A-Y bars and Heaven nightclub.

HMV's majority shareholding in the venues was sold to 'JJ is G-A-Y limited', owned by Jeremy Joseph who founded and already had a shareholding in G-A-Y.

Mr Joseph said: "HMV made a strategic decision to sell certain businesses which included the sale of their shares in G-A-Y almost a year ago. I am delighted to have acquired 100% ownership of the business that I founded 20 years ago and to have secured the future of my 200 employees."

Last week the administrators confirmed that it would make 190 redundancies across the head office and distribution network. There have, as yet, been no redundancies across the stores which remain open.

Last week, when the administrators announced the redundancies, Edwards said: "Since our appointment as administrators over two weeks ago, we have been assessing the financial position of HMV. Following this review, a number of redundancies at the head office and distribution centres have been made. Although such decisions are always difficult, it is a necessary step in restructuring the business to enhance the prospects of securing its future as a going concern.

"We have been very pleased with the level of interest in the business as a going concern, while the response from customers has demonstrated the demand to see HMV remain on the high street. Equally, the support received from suppliers has been very positive and has enabled us to continue trading during the administration. As a result of all of these factors, I remain hopeful we will be able to secure a future for a restructured business."

Nick Edwards, Rob Harding and Neville Kahn, Deloitte partners, were appointed joint administrators to HMV Group plc, HMV Music Ltd, HMV Ltd and Fopp Entertainments Ltd. 

Investment group Hilco bought HMV's secured debt on 23 January, reportedly from Lloyds and the Royal Bank of Scotland. 

It has been reported that HMV had a net debt of about £140m, with Hilco paying about £15m to control that debt. The investors are expected to pay a further £19m to the lenders at a later date, which means the secured lenders will receive just 25p for every pound owed. 

As one of the main creditors to HMV, Hilco will now need to work closely with the administrators on the future of the business, with options including a sale or breakup. It is also reported that some of the biggest suppliers such as Universal, Warner and Sony have backed the Hilco acquisition.

Hilco owns HMV Canada and has worked with Habitat to turn its operations around in the past.

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