HMV disposes of West End store
HMV Group has exchanged contracts on the disposal of its leasehold interest in the HMV store at 360 Oxford Street, London to Forever 21, a U.S fashion retailer, for a total cash consideration of £13.75m. LTM to October 2010 PBIT for the store is £1.7m, with nil gross assets transferring.
The company has received an initial payment of £2.75m, to be followed by further payments of £4.12m in January 2011 and £6.87m on completion in April 2011. The proceeds of the disposal will be used to pay down debt.
The store, which is located towards the western end of Oxford Street, close to Bond Street underground station, will continue to trade as HMV until April 2011. Thereafter, HMV will retain a strong presence in the West End of London and will proactively seek to transfer sales to its existing 50,000 square feet UK flagship store at 150 Oxford Street, close to Oxford Circus, HMV Trocadero at Piccadilly Circus, which trades from 17,000 square feet, and 7,000 square feet shop-in-shop at the Selfridges & Co department store.
Simon Fox, Chief Executive Officer, commented,“In the current challenging retail climate and against a backdrop of changing entertainment markets, this transaction on a multiple of over 8x current profits represents excellent value for our shareholders.
“We are confident of consolidating a proportion of the store’s sales into the remainder of HMV’s West End estate, including our flagship store at Oxford Street, where we recently extended our lease for a further 10 years. HMV's strong London presence will also enable us to redeploy our store colleagues from 360 Oxford Street to stores within a reasonable travelling distance.”
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