HMV faces legal action as unpaid rents reach HK$5 million
Gadget, movie and music retailer HMV may face eviction from several of its Hong Kong store locations in coming weeks as landlords seek to recover unpaid rents and charges.
Separate lawsuits have been filed relating to HMV stores in Causeway Bay, Central and Kowloon Bay, collectively seeking more than HK$5 million (US$640,000), according to court documents cited by the South China Morning Post.
The four-story HMV flagship store on Paterson Street in Causeway Bay was leased from Ever Light in July 2015 for four years at a monthly rent of $1.59 million for the first two years and $1.72 million for the ensuing two.
Another store on Queen’s Road Central was leased in September 2016 from Pridemax for a term of six years at an initial monthly rent of $1 million.
Those two landlords lodged legal action in the High Court of Hong Kong seeking payment of overdue amounts and vacation of the premises.
About three weeks ago, MTR Corporation issued legal proceedings seeking to recover $273,300 in unpaid rent and charges and demanded the store vacate its space in Telford Plaza shopping mall.
HMV was acquired by China 3D Digital Entertainment in March 2016 for $408 million, with the vendor, private equity company AID Partners retaining an approximate 18 per cent share.
In 2015 AID received widespread acclaim for the restructure of the Hong Kong operations of what was once an iconic international brand name in music and movie retailing, but which collapsed in other markets with the advent of digital streaming undermining the popularity of DVDs and CDs.
The Causeway Bay flagship, which incorporates a cafe and live music performance space, began specialising in lifestyle items including headphones, toys and even scooters, along with recognising the returning popularity of vinyl records.