Morrisons is thought to be interested in 20 stores as HMV looks to sell off up to half its 230 sites
Supermarkets are looking at snapping up HMV outlets to boost their convenience store chains.
Morrisons is thought to be interested in up to 20 sites to boost its M Local chain as administrators for HMV look at selling off as many as half of the company’s 230 stores.
Hilco, the restructuring company, is the frontrunner to buy up HMV from administrators. It acquired the entertainment chain’s £120m of debt for £40m, giving it effective control of the company as it is able to block any rival bids. But Hilco is only expected to want about half of HMV’s stores and so the property consultants CBRE and Savills have been brought in to help offload potentially unwanted sites. They are expected to examine offers for the stores in 10 days’ time.
Morrisons has 12 convenience stores at the moment and wants to open at least 50 more this year as it races to catch up with rivals. It is also rumoured to be looking at Blockbuster stores after the retailer went into administration last week. Morrisons admitted that a lack of smaller stores contributed to its poor Christmas performance compared with rivals.
Tesco and Sainsbury’s, which already have significant convenience-store chains, are also thought to be looking at HMV sites. Neither chain would comment on its plans.
All the supermarkets want more small neighbourhood grocery stores because small stores are seeing sales rise rapidly during the economic downturn. Sales rose 4.6% in convenience stores last year as shoppers avoided large out-of-town hypermarkets where they might be tempted to splurge on non-essentials. The total food market grew at 3.2% last year, according to the market analysts Conlumino.
Asda is thought less likely to take on any HMV sites as it does not operate in stores under 750 sq metres (8,000 sq ft).
Neil Saunders at Conlumino said: “There is a big push for good convenience store space and there is probably more demand than supply. HMV has some quite prime sites on high streets, but not all its sites will be suitable.”
HMV fell into administration last week, putting 4,000 jobs at risk. As many as 50 parties have expressed an interest in buying all or part of the business with Hilco, which runs HMV in Canada, leading the field. It is thought to have the support of music labels including Universal Music, Warner Music and Sony for a takeover.
Other retailers thought to be interested in HMV stores include New Look, JD Sports and J Crew, the US retailer which has been looking for a London flagship. Game Retail, which was bought out of administration last year by Comet’s former owners, OpCapita, is interested in buying 45 stores.