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Business News Deals Retail
HMV owner Sunrise buys US retail chain FYE
By Chris Cooke | Published on Friday 24 January 2020
HMV owner Sunrise Records is further expanding its global reach by buying up what is arguably America’s last remaining nationwide entertainment retail chain, FYE.
The Canada-based Sunrise company greatly expanded its network of stores in its home country in 2017, of course, by taking over many of the shops previously run by HMV Canada, which had fallen into receivership. Two years later it crossed the Atlantic after HMV UK also went into administration, keeping a sizable slice of that business going.
Founded in Connecticut in 1993, FYE – or For Your Entertainment – expanded significantly around the US in the 2000s when its parent company, Trans World Entertainment, started buying up other entertainment retail firms, ultimately rebranding most of those acquired stores under the FYE brand. Among the companies swallowed up during that acquisition spree were Camelot Music, Coconut, Media Play and Sam Goody.
However, by the late 2000s FYE was facing the same challenges as everyone else in the entertainment retail business, with CD sales slumping as downloads and streams gained momentum, and many of those people still buying plastic discs gravitated to Amazon. Many stores were closed, while those shops that remained diversified into what FYE calls “pop culture merchandise”, so toys, clothes and assorted tat. As the vinyl revival gained momentum, some stores also dedicated more floor space to that.
Despite the downsizing and diversification, the retail chain continued to struggle, with Trans World’s share price slumping to the extent that it faced the threat of being delisted from the Nasdaq stock exchange. Which means Sunrise is attempting in the US what it has been trying to do in Canada and the UK – take over a last-man-standing high street entertainment retailer on the brink, and try to transform it into a viable business.
Sunrise chief Doug Putman is typically optimistic about that project. “The addition of For Your Entertainment fits with what we are doing with HMV in the UK and Sunrise Records in Canada”, he said yesterday. “There is a space for recognised retail brands that can cater to a new audience of entertainment-hungry consumers”.
He added: “Getting the right mix of product across culture and entertainment – and bringing retail theatre to these outlets that make them a destination – has already proven a winning formula as we’ve turned around and grown Sunrise and HMV since we acquired them. We now intend to grow this chain in the USA and open more new stores starting this year. We are very excited about the opportunity to own such an amazing brand”.
The deal will see Sunrise takeover all of FYE’s 200+ stores across the US, which currently employ over 2500 people. It will also get the FYE and Second Spin online brands. Sunrise and Trans World hope to close the transaction by the end of March.
