Thu, 15 Jan 2009 HMV buys 14 Zavvi music stores, invests in live music

High-street entertainment retailer HMV has bought 14 stores from its ailing rival Zavvi.

The deal is thought to be worth £2 million and should save 269 jobs. Yesterday administrators Ernst & Young closed a further 18 Zavvi stores with the loss of 353 jobs, following last weeks loss of 22 Zavvi stores and 178 jobs.

The Zavvi stores bought by HMV are Bournemouth Castlepoint, Crewe, Dundalk, Dundrum, Glasgow Fort, Glasgow Silverburn, Liffey Valley, Limerick, Newbridge, Peterborough, Plymouth (Drake Circus), Salisbury, Southend and Stockton-on-Tees.

HMV will rebrand and refit the stores, while Ernst & Young still hope to sell the remaining Zavvi stores as a going concern.

Zavvi suffered after the collapse of its main supplier, Woolworths' unit Entertainment UK (EUK), which went into administration in late November. The last Woolworths stores closed earlier this month.

Meanwhile HMV is entering the live music business in a joint venture with MAMA, Britain's second-biggest concert venue-owner.

MAMA currently owns and operates 11 venues across the UK including London’s Hammersmith Apollo and The Forum in Kentish Town, Birmingham Institute and Aberdeen's Moshulu.

The 50-50 joint venture is funded by a share placement worth up to 5 per cent of the music chain, which is expected to raise about £20 million.

Simon Fox, chief executive of HMV, said: “The live music market is booming, despite these tough times. The physical music market is changing structurally and we need to diversify. Live music is an important and growing part of the UK music market and it also delivers a younger demographic to our brand.”

"Music is very much part of our DNA, and by extending the HMV brand into the growing live music and entertainment market, our customers will be able as never before to access and experience music in all of its forms via HMV," Simon Fox added.

As part of the deal the Hammersmith Apollo in West London will become the HMV Apollo, while HMV loyalty cardholders will be able to ‘earn’ tickets to gigs as rewards.

HMV is also setting up a division to sell tickets for events at these and other venues.

Macworld January on sale now! Hot tech tips for 2009 and FREE ultimate Mac games DVD. FREE copy of DocHaven 2.0.5 worth £52 for every reader. For more information click here.