MUMBAI: HMV Canada, the country's biggest record store chain has been sold to Hilco UK, a British retail restructuring specialist, for $3.2 million.

HMV Canada operates 121 stores and is the only national specialty entertainment retailer in the country. HMV Canada was a major music retailer at one time, but has been hobbled by consumers increasingly going online for music, and falling physical CD and DVD sales.

HMV Group Chief Executive Simon Fox said, "The board has fully explored the options available to it for HMV Canada, and believes that a sale to Hilco is the correct decision for the business at this time, whilst reducing the operating leverage in the continuing group. The group is focusing on clear and tightly defined plans for transforming HMV into a broad-based entertainment business."

Hilco will provide HMV Canada up to $25 million in operating capital to help local management grow the business online.

Hilco UK CEO Paul McGowan said, The management team of HMV Canada has built a plan that will extend the period over which the residual hard-copy music and film market can be maintained....

HMV Canada's parent company, the UK -based HMV Group has been selling off assets amidst slumping sales of CDs and DVDs as consumers turn to online entertainment. It intends to expand its current digital platform for consumers, to incorporate streamed content.