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Thursday 03rd of March 2011
March 1, 2011    

HMV Group issues further profits warning

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by Kay Murchie
HMV Group issues further profits warning

Music, books, DVDs and games retailer, HMV, has watched its shares plummet 20% today after the firm issued another profits warning.

It also revealed it would currently fail to meet the conditions of its loan agreements in April.

The retailer, which also owns Waterstone’s bookshops, in January said it was struggling to meet the terms of its lending agreements.

The company continues to struggle amid tough competition from supermarkets and internet companies, such as Amazon.

The chain recently announced plans to close 60 stores over the next year after the heavy snowfall in December dented sales.

Chief executive Simon Fox said today: “Trading conditions remain tough, reflecting a difficult consumer environment as well as the changing markets in which we operate.

“However, our business is adapting quickly to respond to these external factors, and we are confident that our plans will ensure its long-term sustainable future.”

In January, HMV said credit insurers were reviewing the level of cover they provide on the group.

However, this undoubtedly raises concern among investors after the withdrawal of credit insurance led to the collapse of iconic department store, Woolworths, as well as music and games retailer, Zavvi, back in 2008.

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