January 20, 2013 15:50

Major record labels assemble rescue package for struggling HMV

Universal Music, Warner Music and Sony cut the price of CDs and DVDs

Photo: PA

A consortium of major music labels and film studios are reportedly assembling a rescue package to save HMV from going out of business.

According to The Sunday Times, Universal Music, Warner Music and Sony are set to cut the price of CDs and DVDs, and give the failing retailer generous credit terms, to help it get back on its feet after falling into administration.

Universal Studios and Warner Studios are also reported to be behind the deal to prevent the company from going under. Industry sources claim the industry goliaths are desperate to keep a specialist high street outlet, such as HMV, to prevent cut-throat pricing from supermarkets and online stores.

A source told the newspaper:

They don’t want their only choice to be Tesco or Amazon

On Friday (January 18), it was reported that video games retailer Game had expressed an interest in buying HMV. Deloitte, who were called in to administrate the collapsed retailer on Tuesday (January 15) putting 4,000 jobs at risk, says it has received over 50 expressions of interest in HMV. These include a "broad range" of parties including wealthy individuals, private equity groups and Game – which is targeting as many as 50 shops.

According to The Sunday Times report, the music and film industry consortium are believed to be favouring a bid by Hilco, an investor that specialises in struggling consumer businesses.

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