HMV’s white knights walk away
Two prospective saviours of the HMV Hong Kong business have walked away after it became clear they would be unlikely to be allowed to use the historic brand name.
A liquidation sale may now be held for stock stored since the retailer entered provisional liquidation last December, said to include about 70,000 DVDs, 20,000 CDS and 9000 vinyl records.
“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,” liquidator Wong Sun-keung, a partner at accounting firm Vision AS, told the South China Morning Post.
“There is some legal issue that the HMV licences here are considered to be ended with the liquidation. It is a shame,” he said.
Citing the trademark issue, Wong says he will no longer be seeking a buyer for the business and will now work with the company’s creditors to find alternative ways of recovering about HK$40 million (US$5.1 million) in debts.
A committee comprising seven representatives of the company’s 340 creditors will vote before month’s end on the next step, most likely a massive liquidation sale.
“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 told the SCMP.
“We are negotiating with a landlord for a potential location in Causeway Bay. Another possible location will be in Mong Kok.”
While the stock, currently stored in shipping containers, has a book value of $9 million, given the discounts applicable in a liquidation sale, it may have a realisable value of less than $1 million.