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Tuesday, 18 January 2011

Further difficulties for HMV

With all the reports on the increase in inflation to 3.7% one piece of business news that was pushed down the agenda was the further troubles of the high street retailer HMV.

Robert Peston was brought onto the Radio 4 PM programme to "break the news" that 2 major music and entertainment suppliers had been denied credit insurance for any additional supplies to HMV. The withdrawal of this suppliers credit insurance has, in the past, been a precurser to more serious problems but this is normally because if the suppliers refuse to supply then a collapse is likely. This was a factor in the falling into administration of the Borders book chain.

However, HMV are not purchasing much stock at the moment and it is possible that the credit insurers have changed their attitude to risk. Importantly for HMV, current suppliers have said to Robert Peston, at least, that HMV is crucial for their business and so will continue to supply the retailer.

So, as far as the music and entertainment retail industry is concerned it appears that "We are all in this together"

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