Please visit http://www.companyrescue.co.uk/ for confidential help and insolvency advice or email keiths@ksagroup.co.uk

Thursday, 13 December 2012

HMV shares plunge on debt warning

HMV Group has announced that it may breach its banking covenants by early next year.  Consequently the shares fell nearly 40% on the news.  The company has seen a 13.5% reduction in like for like sales in the 26 weeks to the end of October and net debt has risen to £176m.  The company has undergone a number of new initiates to try and boost sales such as showcasing technology in a number of revamped stores.

So far the banks have been supportive while so many commentators have predicted its demise.  See our earlier blogs on

http://companyrescue.blogspot.co.uk/2012/01/can-hmv-survive.html and http://companyrescue.blogspot.co.uk/2011/12/hmv-faces-difficult-2012.html

The company is still hanging on to their credit.  It is interesting that Comet went into administration despite having stable sales but a huge debt whereas HMV's debt is growing and sales have been sliding for the last 2 years.  One reason is because HMV occupies a unique place in the market and it does not have any direct competitors on the High Street.  There also appears to be a plan in place to turn the business around albiet slowly.  They have sold off the live music businesses to try and trim debts.

Previously HMV have not ruled out the use of a company voluntary arrangement or CVA to try and rescue the business.  However in the recent statement they have said they do not wish to close down any stores which a CVA can do.

1 comment :

  1. i hope it closes down , old , overpriced out of touch with customers , needs to go .

    ReplyDelete

Many thanks for your comments. If you have a private business problem and you want advice give us a call on 0800 9700 539 or email me at keiths@companyrescue.co.uk. If you are a professional advisor with a troubled client, please suggest they visit www.companyrescue.co.uk or contact me as above.

Web Analytics