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Enoch Yiu

HMV may hold a huge liquidation sale in Hong Kong with tens of thousands of discounted CDs, records and DVDs up for grabs after two potential buyers decided to walk away from the bankrupt music giant, according to its liquidator.
Several would-be buyers had been gearing up to act as white knights by acquiring the 25-year old Hong Kong arm of the iconic music vendor after it went into provisional liquidation in December, said Wong Sun-keung, a partner at accounting firm Vision AS.
“Two potential white knights, one a mainland company, the other a Hong Kong firm, had been very keen on rebooting the HMV business in the mainland and Hong Kong,” he told the Post.
However, after several months of discussion, they both decided to walk away last week after learning they may not be able to use the HMV brand, Wong said.




“There is some legal issue that the HMV licences here are considered to be ended with the liquidation. It is a shame,” he said.
Since the legal issue may not be easily solved, Wong has decided not to continue his quest to find new buyers. Instead, he will work with HMV’s creditors to find other ways to recoup more than HK$40 million (US$5.1 million) in debts.
A seven-member committee, which represents the 340 creditors, will decide by the end of the month on the next step forward.
“It may include the option of selling the stock to some music collectors. Or we may host a big liquidation sale for a few days,” Wong said.
“We are negotiating with a landlord for a potential location in Causeway Bay. Another possible location will be in Mong Kok.”
Shoppers turned away as HMV winds up 25-year-old Hong Kong retail chain
HMV’s vast array of unsold stock is now being stored in two containers in Sun Tin, Yuen Long.
“We have outstanding over 100,000 items. It includes about 20,000 CDs, 50,000 DVDs, 24,000 Blu-ray discs, 9,000 vinyl records,” he said. “There are also several of HMV’s iconic dog statues, which may attract collectors.”
HMV Digital China voluntarily wound up its retail unit, HMV, on December 18, caving under the pressure of the digital download era. The company also has film production and artist management businesses which are not affected.
HMV Digital China chairman Stephen Shiu Jnr fought back tears at a creditors’ meeting in January, as he revealed that the local unit of the iconic brand had suffered losses of HK$300 million (US$38.3 million) in just two years.
HMV shares slump by 25 per cent as landlords sue for HK$5 million in overdue rent
Crushed by online music sales, the stores that had once attracted superstars such as Mariah Carey, Boyzone and Backstreet Boys to meet their fans had not been able to generate sufficient income to pay their rent and other expenses.
Although the remaining stock has a book value of HK$9 million, it will have to be sold at a discount, meaning a liquidation sale may only generate about HK$500,000 to HK$1 million, Wong said.
The biggest creditors are the several landlords of the HMV flagship stores, who are owed a total of HK$30 million, Wong said, while the rest are the many small suppliers. Owners of HMV coupons will not be able to get a refund.
Ten days after Hong Kong HMV’s collapse the UK unit, which is under separate ownership, also went into administration. Canadian company Sunrise Records swooped in as a white knight to buy 100 stores in the UK, but will still close 27 shops.
In Asia, Japan is now the only country that still has HMV shops operating.


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A general view of HMV in Style House, The Park Lane, Causeway Bay. Music and DVD retailer HMV called in administrators after a last-ditch attempt to secure funding failed, putting more than 4,000 jobs at risk. The 239 stores in the UK and the Republic of Ireland will be kept open for the time being while they look for a buyer. 16JAN13

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The potential sale would see 100,000 CDs, DVDs, Blu-rays and records offered at heavily discounted prices
HMV owes about HK$40 million, mainly to landlords, after years of falling CD and DVD sales forced it into administration


The potential sale would see 100,000 CDs, DVDs, Blu-rays and records offered at heavily discounted prices.


Retailing

Exclusive | Debt-ridden HMV mulls big liquidation sale of CDs, DVDs in Hong Kong after potential buyers walk away

The potential sale would see 100,000 CDs, DVDs, Blu-rays and records offered at heavily discounted prices HMV owes about HK$40 million, mainly to landlords, after years of falling CD and DVD sales forced it into administration

The potential sale would see 100,000 CDs, DVDs, Blu-rays and records offered at heavily discounted prices

HMV owes about HK$40 million, mainly to landlords, after years of falling CD and DVD sales forced it into administration