HMV sells Japanese business for £70m

Entertainment retailer HMV has agreed to sell its HMV Japan business - consisting of 62 stores and the hmv.co.jp website - for GBP 70 million (EUR 103.6m), to DSM Investments.

HMV announced that it was reviewing its Japanese division last month following a drop in profits over the last financial year.

"Following recent consolidation in the market for entertainment retailing in Japan, and our review of the strategic options for HMV Japan, we have decided that this sale represents the best value for our shareholders," commented Simon Fox, chief executive of the HMV Group.

"The sale of HMV Japan enables the Group to focus on the markets where it has market-leading positions. The proceeds will be used to pay down the Group's debt, which is an important step towards meeting our medium term leverage targets," he added.

The deal is expected to be completed next month.

HMV Japan was established in 1990 and has become the third largest entertainment retailer in terms of market share. Website hmv.co.jp contributed 24 per cent of sales in 2006/2007.