Since the demise of JJB Sports, rival chain Sports Direct has been growing both its market share and commercial property portfolio. Chief executive Mike Ashley, who also owns Newcastle United Football Club, has increased the worth of the chain several times over and, seemingly, has no intention of halting the rapid expansion of the sporting goods company.
Now it has emerged that the entrepreneur has paid up to £5 million to take over the lease of entertainment chain HMV’s flagship store on Oxford Street, London. The 60,000 sq ft store benefits from a prime location in a thriving market and will lend a large amount of prestige to Sports Direct.
Mr Ashley negotiated the deal with administrators Deloitte who remain involved in the affairs of the stricken chain despite the fact it was bought out by Hilco earlier this year. It is now rumoured that the Sports Direct store in the nearby Plaza Shopping Centre will close in order to allow bosses to focus more clearly on the larger property, although Sports Direct have so far declined to comment on the acquisition.
Although the flagship store may no longer be a part of the HMV portfolio, Hilco has made the chain’s existing presence on Oxford Street a top priority. In fact, it is believed that a deal has already been struck to open a smaller store located at 363 Oxford Street – a site which is presently occupied by Footlocker.
After acquiring HMV three months after it collapsed into administration, restructuring specialists Hilco embarked upon a plan to turn the fortunes of the chain around. This has included refocusing the company’s core values to once again make music and DVD sales a top priority, as bosses believe the problems began when electronic and tablet sales distracted consumers from the essence of HMV.
Competition from internet retailers also played a major part in the demise – something which will be addressed through the chain’s website once current financial issues have been ironed out with assistance from Deloitte.
The store portfolio has also been carefully examined by Hilco, with advice being provided by property experts from Savills and CBRE. Hilco concluded that larger stores, such as the flagship Oxford Street property, provided too much floor space for the new-image HMV and as such have begun to consolidate stock into smaller properties across the country.
With the property – which was opened by Bob Geldof in 1984 and since then has held the title of “biggest music store in the world” – no longer a player in HMV’s future, it seems the growth of online shopping has, once again, resulted in a casualty in the competitive entertainment industry.
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