HMV owner Hilco has bought Irish DVD rental chain Xtravision out of receivership, which could save its 130 stores.
The rental business appointed receivers Ernst & Young in April to seek protection from its creditors after the demand for DVD rentals dropped and credit insurance for the business was withdrawn.
Restructurer Hilco’s decision to buy Xtravision could save the 130 stores and its remaining 803 staff.
Larry Howard who manages Hilco in Ireland said: “The final transfer of stores to Hilco will take place gradually following discussions with a number of the company’s landlords aimed at regularising the terms and conditions of leases. We have had supportive messages from a number of landlords and we are, therefore, hopeful that we will be able to retain all of the stores which we have agreed to acquire.”
Blockbuster commercial director Gerry Butler has been hired as chief executive of Xtravision. It is a return to the rental firm for Butler who was formerly its chief operating officer.
Hilco would not disclose the value of the deal but it is thought that Xtravision’s current owners Ulster Bank Diageo Venture Fund and Pageant, who bought the chain out of examinership in 2009, will recoup all of €22m they have invested in the chain.
In April, Hilco rescued entertainment retailer HMV after it collapsed into administration as a result of a fall in physical music and DVD sales.This week Hilco announced it would be reopening four of the country’s 16 HMV stores, which closed in January.
Hilco chief executive Paul McGowan said: “Xtra-vision is a very strong brand in the Irish market and we are happy to add it to our fast-growing Entertainment Division. It is a good fit alongside HMV which we now operate in the UK, Ireland and Canada.”
The acquisition comes months after Hilco’s rival Gordon Borthers bought UK rental DVD chain Blockbuster out of administration, taking 264 stores.