Sports Direct's Mike Ashley in talks over possible HMV bid

21st Jan 2019 09:40

(Sharecast News) - Sports Direct founder Mike Ashley has been linked with a possible rescue bid for collapsed music and film retailer HMV.Ashley, who also owns House of Fraser, Evans Cycles and has a 26% stake in Game Digital, is reported to have held talks with HMV's suppliers and tabled a bid with administrators KPMG, according to Sky News and other media outlets.Neither KPMG nor Games Direct have commented on the reports.Should Ashley acquire HMV, it will be third retailer he has bought out of administration since August, when he acquired department store chain House of Fraser. As well as HMV, he is believed to be interested in increasing his stake in Debenhams, which is looking to refinance its debts after a tough year, and has been linked with Hamleys, after the toy retailer reported hefty losses.HMV has struggled in recent years as digital streaming and downloads of music and film took off, and the chain, which has 125 stores, went into administration for the second time in six years three days after Christmas.The retailer accounts for around a third of physical music sales in the UK, but owner Hilco said the high street was facing a "tsunami of challenges" and that festive trading - the year's most important sales period for nearly all retailers - had been "extremely weak".It is thought that Ashley could look to merge HMV and Game Digital should his bid be successful.Retail analyst Nick Bubb said: "[Ashley] is presumably interested in the fact that the big entertainment suppliers will be offering margin and working capital support to maintain such a big chunk of the UK market, so a deal may look low-risk in the short term."But HMV is hardly a licence to print money, given the way the physical entertainment markets are collapsing."