Morrisons, Tesco and Sainsbury's believed to be interested in buying up property
A large number of HMV stores across the UK could be turned into supermarkets as the company seeks ways to alleviate its debt.
It is reported that the high street retailer could sell up to half of their 230 stores nationwide with Morrisons, Tesco and Sainsbury’s all believed to be interested in taking over stores and converting them into their own brand convenience stores.
The Guardian reports that Morrisons is thought to be interested in up to 20 sites to boost its M Local chain, citing a lack of smaller convenience stores as the reason behind a poor Christmas period in comparison to their rivals. It is also understood that Morrisons could also look to buy up properties from Blockbuster, who also went into administration earlier this month.
Asda is less likely to be looking at HMV sites as it does not open stores under 750 sq metres (8,000 sq ft).
Small supermarket grocery shops have been one area of business seeing an upturn in profits during the financial crisis as customers’ routines change and they seek to avoid buying anything non-essential to their day to day life. Sales in convenience store profits rose 4.6 per cent in 2012, helping push food market profits up by 3.2 per cent.
Discussing the link between HMV and the potential sale of 115 stores, Neil Saunders at market analysists 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.”
Meanwhile, HMV was handed a lifeline this week when debt restructuring specialists Hilco bought the high street retailers £176m debt for £40m.