HMV, Debenhams And Mike Ashley/House Of Fraser

[IanSmithISA]

Good morning,

With the news that HMV are in administration again it would be easy to say that this is the end for them, but to my mind both Mike Ashley and Debenhams should be queuing up to buy them, both Debenhams and House Of Fraser have a lot of space not yielding the required profit margins so dropping HMV in as either HMV or an in house brand seems to make a lot of sense.

I don’t understand how Mike Ashley with his 30% stake in Debenhams has failed to take control and with there being such a difference between the current share price of about 5p and the year high price of 35p he is unlikely to want to purchase any more shares and be forced into offering to buy the rest at 35p.

Give it another 6-12 months and this obligation could become much less onerous but would it be too late?

So who gets HMV would suggest to me the fate of Debenhams and if you have the nerve then Debenhams could be a great buy.

If Mike Ashley gets it and integrates it into Debenhams then it seems likely that he is aiming for control of Debenhams.

If Mike Ashley gets it and integrates it into House of Fraser then it would suggest a lack of interest in Debenhams and their future is in the hands of the current management.

If Debenhams gets it then it would be a real boost for the current management’s credibility and the stores future prospects

If neither gets it then I would be really surprised because there is still a massive market for CDs and DVDs which may be shrinking too much for a specialist store but not for a section in a more general store.

Bye

Ian

[WickedLester]

I'm not sure I agree with your logic. HMV has gone bust twice because it has been faced with fast and structural changes to its offering. First the rise of Amazon and ebay and a massive squeeze on its margins and now the rise of streaming and the likelihood the market for cd's and dvd's is going to end up left with a limited number of collectors such as myself, rather than the mass market appeal that sustained them for so long.

I can't see why there would be any benefit to Debenhams in buying HMV, even the big supermarkets don't seem to bother stocking cd's and dvd's anymore.

FWIW as much as I like shopping at Debenhams, if their Christmas has been as bad as it appears to have been for the rest of the high street then I wouldn't be surprised to see them doing some sort of CVA soon. I would like to see them survive in some form because I have always been a fan. I did buy a very few shares at around 50p for the yield but when they warned I realised the case for investing was not sound and sold out for around 30p. Fortunately, all in it wasn't a particularly painfull loss.

[WickedLester]

It looks like Mike Ashley is interested in buying HMV.

https://www.msn.com/en-gb/money/compani ... ailsignout