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| HMV to snap up some Zavvi stores | HMV to snap up some Zavvi stores |
| (30 minutes later) | |
| Entertainment retailer HMV has said it is to buy 14 stores from troubled chain Zavvi, funded by selling new shares. | Entertainment retailer HMV has said it is to buy 14 stores from troubled chain Zavvi, funded by selling new shares. |
| Proceeds will also be used to fund a move into the live music market, taking a joint stake in a firm running 11 venues including Hammersmith Apollo. | Proceeds will also be used to fund a move into the live music market, taking a joint stake in a firm running 11 venues including Hammersmith Apollo. |
| The 5,100 capacity venue will become the HMV Apollo in a naming rights deal. | |
| HMV also said that sales in the five weeks to 3 January - which includes the Christmas period - were up by 2.9%, or by 0.5% not including new stores. | HMV also said that sales in the five weeks to 3 January - which includes the Christmas period - were up by 2.9%, or by 0.5% not including new stores. |
| However, its Waterstone's book chain saw total sales down 0.9% in the same period. | However, its Waterstone's book chain saw total sales down 0.9% in the same period. |
| Rebranding | Rebranding |
| The Zavvi stores it is buying are all profitable, HMV said, and are primarily in locations where it does not currently have a store. | The Zavvi stores it is buying are all profitable, HMV said, and are primarily in locations where it does not currently have a store. |
| It expects the cost of the purchase to be about £2m - including fitting out and rebranding the stores. Nine of them are in the UK and five in the Irish Republic. | It expects the cost of the purchase to be about £2m - including fitting out and rebranding the stores. Nine of them are in the UK and five in the Irish Republic. |
| By extending the 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 FoxChief executive, HMV | By extending the 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 FoxChief executive, HMV |
| Music, games and DVD chain Zavvi suffered after the collapse of its main supplier - Woolworths' unit Entertainment UK (EUK) - which went into administration in late November. | Music, games and DVD chain Zavvi suffered after the collapse of its main supplier - Woolworths' unit Entertainment UK (EUK) - which went into administration in late November. |
| Since then, Zavvi has had difficulties in sourcing stock and has been forced to enter new trading arrangements. | Since then, Zavvi has had difficulties in sourcing stock and has been forced to enter new trading arrangements. |
| On Wednesday, it announced it was closing a further 18 stores with the loss of 353 jobs. | On Wednesday, it announced it was closing a further 18 stores with the loss of 353 jobs. |
| The remaining 74 stores throughout the UK will remain open and the administrator is still hoping to sell the business as a going concern. | The remaining 74 stores throughout the UK will remain open and the administrator is still hoping to sell the business as a going concern. |
| Ticket sales | Ticket sales |
| As part of the live music deal, HMV will form a new business with MAMA, the firm that currently deals with the ownership and operation of the venues, which also include The Forum in London's Kentish Town, the Birmingham Institute and Aberdeen's Moshulu. | As part of the live music deal, HMV will form a new business with MAMA, the firm that currently deals with the ownership and operation of the venues, which also include The Forum in London's Kentish Town, the Birmingham Institute and Aberdeen's Moshulu. |
| In the year to 31 July 2008, the 11 venues had combined revenues of £20.25m, with operating profits of £2.24m. | In the year to 31 July 2008, the 11 venues had combined revenues of £20.25m, with operating profits of £2.24m. |
| HMV is also setting up a division to sell tickets for events at these and other venues. | HMV is also setting up a division to sell tickets for events at these and other venues. |
| The engagement of artist and fan is the key driver of the music industry MAMA Group | The engagement of artist and fan is the key driver of the music industry MAMA Group |
| "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," said chief executive Simon Fox. | "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," said chief executive Simon Fox. |
| The MAMA Group said the deal "alters the face of the live venue business in the UK". | The MAMA Group said the deal "alters the face of the live venue business in the UK". |
| "The engagement of artist and fan is the key driver of the music industry and that engagement is at its most evident at live events," the firm added. | "The engagement of artist and fan is the key driver of the music industry and that engagement is at its most evident at live events," the firm added. |
| It said the venture with HMV would link tickets, music and merchandise. "A direct artist-to-fan relationship is a way to help the music industry grow and prosper," it said. | It said the venture with HMV would link tickets, music and merchandise. "A direct artist-to-fan relationship is a way to help the music industry grow and prosper," it said. |