Newsletter

www.hilcocapital.com

p2 ➤

Re:Capital acquires Betta Foods

Stars show their support for HMV

Q3 2014

Re:Capital Australia, Hilco Capital’s Australian arm,

completed its third major transaction with the

acquisition of specialist confectionery manufacturer

Betta Foods. The Broadmeadows, Melbourne-

based business joins chocolate

manufacturer, Hillier’s, in a

newly formed holding company,

the Confectionery Innovation

Group.

Betta Foods was established

in 1954 and specialises in the

production of liquorice and

marshmallow products which

are sold under the Capricorn and

Eskimo brands. The company also produces private

label liquorice, marshmallow and ice cream cone

products for Australia’s leading supermarket chains

and fast food groups.

The HMV Store Managers’ Conference saw a stellar

cast of performers take to the stage at London’s

Vinopolis, reflecting the entertainment industry’s

renewed support for the revitalised retailer.

Following the appointment of

PwC as Administrators of the

mobile phone retailer Phones4u

in September, a team from

Hilco was appointed to design,

implement and manage an

effective wind down and exit of a

number of non-core stores.

The Hilco team worked alongside

PwC and the Phones4u team to

manage the wind down of 421

stores over a four week period.

The project represents the largest

single closure programme of retail

stores since the administration of

the Clinton Cards and Birthdays

greeting card chain in 2012.

198 Phones4u stores and their

staff transferred to new owners,

including Vodafone and EE, while

Dixons Carphone hired former

Phones4u staff working in 161

concessions in its stores.

Hilco assists Administrator of Phones 4u

in 1954 and specialises in the

production of liquorice and

marshmallow products which

The Re:Capital team will work with the management

teams of Betta Foods and Hillier’s to identify

synergies within the group, while pursuing expansion

opportunities.

September also saw Hillier’s

kick off its centennial

celebrations with a launch

party at Her Majesty’s Theatre

in Melbourne. The theatrical

theme was in honour of Ernest

Hillier’s original success in

supplying chocolate to theatres

that established the business.

Hillier’s, which is Australia’s oldest chocolate

manufacturer, has produced a special centenary

edition of its Famous Red Box, including all of

Australia’s favourite centres.

The morning’s keynote presentations by HMV’s

management team and key suppliers were

interspersed with live performances by global

superstar, Ed Sheeran (pictured), former Supergrass

front man, Gaz Coombes, and legendary singer-

songwriter, Neil Diamond.

Meanwhile, stars from Annie Lennox to McBusted

appeared by video to show their gratitude to HMV’s

Store Managers for an exceptional year that has

seen HMV grow its market share and return to

profitability.

The evening saw Golden Nipper awards

2 Hilco Capital Newsletter Q3 2014 www.hilcocapital.com

Newsletter

➤p1

The resurgence in popularity of Burleighware

continued apace with London’s Evening Standard

reporting in that Burleigh crockery can be found

gracing London’s most in-demand restaurant tables.

Burleigh’s Asiatic Pheasants design, which the

company has been making since 1862, can be seen

in Mayfair’s Gymkhana, which won the Restaurant

of the Year in this year’s National Restaurant Awards.

Meanwhile, as the Standard puts it, “the precise

same pheasant shows up at Chiltern Firehouse, the

A-listers’ hangout of choice, as well as the British

Museum’s new Court Restaurant”, concluding

that “heritage pottery has made a spectacular

comeback.”

TV phenomenon The Great British Bake Off has

also played a major role in stoking public demand

for high quality, British-made ceramics with sales

of Hartley Greens – part of the Denby group along

The momentum gained at the revitalised Kraus

Group through a successful start to the year

continued through the third quarter with Group

revenues rising by 20% compared with the same

period in 2013, driven by a $7 million investment in

new product development. So far this year, Kraus

– which was acquired by Hilco in June 2012 – has

rolled out 40 new styles of flooring, compared with

35 in 2013 and just seven in 2012.

The demanding development schedule required

Kraus to further ramp up production, resulting in

the business hiring an additional 30 staff over the

summer months. During the month of August alone,

Kraus’ factory in Waterloo, Ontario produced over

one million square metres of carpet – enough to

cover 140 football pitches.

Kraus flooring on a roll in Q3

Burleigh on all the top tableswith Burleigh – rocketing after being featured on

the programme recently. Denby has also restarted

production of cake stands, which had been

discontinued several years ago, after they featured

on the programme.

Burleigh has also launched a new range in

collaboration with Highgrove, the home of TRH

The Prince Of Wales and The Duchess of Cornwall.

Highgrove Coronation Meadows features botanical

illustrations of meadow flowers and is inspired by

the Coronation Meadows project, which aims to

establish wildflower meadows across the UK.

Kraus also sponsored the Red Carpet Suite

(pictured) at the Toronto International Film Festival

for the second year running. The suite – a VIP

cocktail lounge for stars to relax in before they walk

the red carpet – was designed by the creative team

from House & Home magazine and utilised Kraus’

Rubicon commercial carpet tile.

presented to the retailer’s

best performing stores

and team members while

stadium rockers Simple Minds

brought proceedings to a rousing

conclusion with an energetic

set of anthems including,

appropriately for the resurgent

HMV, Alive and Kicking.

In addition to growing sales,

profitability and market share, the

past twelve months have seen a

strong recovery in the HMV brand

itself which had been damaged

by the decline and failure of the

old business. In August, research

firm YouGov reported that HMV’s

YouGov BrandIndex score had

reached “a very healthy 10.6”,

adding that “in most of our

key metrics, we have seen

improvement, featuring a good

degree of consistency, a contrast

to the tumult HMV experienced

previously.”

HMV opened a further three high

street stores during the third

quarter, returning to locations

where it had previously had

a presence. In Croydon and

Braehead, the business opened

in new locations close to the

previous sites while in Moorgate

in the City of London, HMV

reopened in the same unit it had

previously occupied.

A new store in Luton is scheduled

to open in November which will

take the total number of UK

locations to 128 as the business

enters the critical Christmas

trading period.

www.hilcocapital.com Hilco Capital Newsletter Q3 2014 3

Newsletter

HMV Ireland supports home grown talent

The Clipper Marine team achieved over £3 million

of sales at this year’s Southampton Boat Show in

September, smashing their previous record at the

show. Clipper exhibited a wide range of Bavaria

boats, including the UK debut of the Easy 9.7 sail

boat and the 360 Sport Coupé power boat (pictured).

This year’s show attracted over 112,000 visitors

HMV Ireland’s year long

sponsorship of the First Music

Contact scheme reached its

conclusion with the Hard Working

Class Heroes music festival

(pictured) and conference in

venues across Dublin in early

October. The scheme, which is

backed by the Arts Council of

Ireland, is a national organisation

dedicated to Irish bands and the

independent music sector in

Ireland and has propelled acts

including The Strypes, Kodaline

and Hozier on to major label

deals and international success.

HMV’s headline sponsorship has

seen First Music Contact’s acts

perform in the Dublin and Belfast

flagship stores every Friday

throughout the year together with

the stores stocking CDs from the

best acts which has resulted in a

number of up-and-coming bands

breaking into the Irish Top 10 for

the first time in their careers.

Visit www.hwch.net for more.

Denby has unveiled updated branding, together

with a new tagline that plays – quite literally – to

the strengths of their products. The move coincides

with the launch of a new, responsively designed

website that has already seen a sales increase of

18% compared with the same period last year.

Both sales and production at Denby continued to

run at record levels in the third quarter, buoyed by a

near-100% increase in exports, coupled with a solid

UK performance.

The PureHMV loyalty programme launched in Ireland

in September, bringing ‘cool stuff money can’t buy’

to HMV Ireland and Xtra-vision customers for the

first time. Members earn points on transactions

at HMV and Xtra-vision which can be traded for

exclusive signed merchandise, priority access to in-

store events, red carpet premiere tickets and entry

into contests to win once-in-a-lifetime experiences.

The scheme has already been a huge success in

Canada and the UK since its relaunch. PureHMV

members account for 40% of all spend in HMV’s

stores in Canada while HMV UK sells over 8,000

new membership cards every week.

Denby stronger than ever

PureHMV comes to Ireland

That’s show business for Clipperand saw the team double the number of units sold

at Southampton last year.

Clipper Marine’s brokerage sales for the year to date

were up 235% year-on-year at the end of the third

quarter while the company’s yacht charter service

(pictured, below) enjoyed brisk trade with a busy

schedule of corporate hospitality and private events.

4 Hilco Capital Newsletter Q3 2014 www.hilcocapital.com

Newsletter

Published by Hilco Capital Limited, 80 New Bond Street, London W1S 1SB · Tel (0) 207 317 2050 · Fax (0) 207 317 2051 · © 2014 Hilco Capital Limited · All rights reserved © 2014 Hilco Capital Limited All rights reserved

NEWSFROM

ACROSSTHE POND

Hilco Brands’ Polaroid launched the Cube in September. The 1.5” rubberised cube is a robust and beautifully designed, full HD action video camera. Designed by Ammunition, the agency led by award winning Apple and Beats industrial design veteran Robert Brunner, the Polaroid Cube is set to create a new entry level proposition in the action video camera market, retailing at just $99.

The Government of Mexico appointed Hilco Acetec to sell assets under its control. The 140 million peso auction was held over three days in September and attracted over 300 buyers.

The New Orleans Redevelopment Authority (‘NORA’) awarded Hilco Real Estate the contract to sell at auction over 2,500 properties that were damaged by Hurricane Katrina. Hilco Real Estate had previously sold 462 NORA properties over four separate auctions, totalling $19.8 million.

Through an assignment for the benefit of creditors in California, online jewellery auctioneer, Bidz.com, has retained Hilco Streambank as the exclusive agent to sell the company’s intellectual property. Assets include the Bidz.com trademark, the bidz.com and buyz.com premium domain names and a 6.7 million record customer database.

Hilco Industrial was appointed in September to sell the City of Detroit’s excess municipal transportation and utility maintenance assets. The sale will include aged police cars, fire trucks and rolling stock.

New starter joins Re:Capital Canada

Legend of Football award for Giggs

Legends in their own lunchtime

Hilco team rides to front of the pack

Stephen Moore joined the team in September as

Investment Director of Re:Capital Canada, based in

Toronto. Stephen is a qualified Chartered Accountant

in both Canada and the UK, having trained at PwC in

London, and is a Canadian Chartered Insolvency and

Restructuring Professional.

Stephen brings over 14 years’ experience in

corporate advisory, restructuring and turnaround and

Hilco Capital’s Matt Holt

(pictured), Hugh Whitcomb and

Chris Emmott took part in the

Prudential RideLondon-Surrey

100 in August, raising funds for

Children with Cancer UK.

Hilco’s team completed the 100

mile cycle race in 4 hours 48

minutes, finishing eighth out of

the 70 teams that competed, in

spite of unseasonable weather

conditions thanks to the tail end

of Hurricane Bertha.

With the Children with Cancer

annual fundraiser coming up, the

team would be grateful for any

final donations via justgiving.com/PrudentialRideLondon.

With Hilco Capital’s regular

five-a-side team beset by

international call-ups (Foster,

Caine, O’Neill), and trials in

Stoke (Stamp), Hilco fielded an

experimental side against a team

from Resolve in September.

With Nick ‘The’ Kitchin between

the posts and Nick ‘Dynamo’

Underwood bossing midfield,

Hilco started confidently with

Holt scoring a blinder. Resolve

were rattled and Holt and Sher

(pictured) quickly scored a brace

each. A substitution for an injured

Matt Holt saw Chris ‘Special

Skills’ Emmott score, with the

match ending 14 – 12 to Hilco.

Ryan Giggs was presented

with the prestigious Legend of

Football Award at this year’s HMV

Football Extravaganza. Now in

its 19th year, past events have

seen the award given to such

luminaries of the beautiful game

as Pelé, Sir Alex Ferguson, Sir

Stanley Matthews, Sir Bobby

Charlton and José Mourinho.

The event, which raised over

£400,000 for music therapy

charity Nordoff Robbins, saw

Giggs reunited with his former

Manchester United ‘class of

92’ team mates while Giggs’

fellow Welshmen, rock band

Stereophonics, flew in from the

US for the evening to perform a

blistering set of their hits.

joins Re:Capital from Alvarez & Marsal in Toronto.

He has advised lenders, equity sponsors, public

and private clients on restructuring matters, most

notably in the manufacturing, retail, pharmaceutical/

healthcare and professional services sectors. He

has also acted in court-appointed officer roles under

formal Canadian insolvency proceedings.

All of us welcome Stephen to the team.