EMBATTLED retailer HMV has warned that it will miss profit targets for the second time this year.
The music and books retailer also admitted it was set to breach certain terms of its bank loan and had opened talks with lenders in the hope of amending its banking terms. It said lenders continued to be “supportive”.
Given the scale of the challenges facing the firm, HMV said its chairman of two years, Robert Swannell, who was recently appointed to the same role at Marks & Spencer, was to be replaced by senior independent director Philip Rowley.
HMV said trading conditions had not improved since its last update in January, when it warned that tumbling sales over Christmas would leave profits at the lower end of market expectations.
The group, which also owns the Waterstone’s book chain, said it now expected to miss forecasts for underlying pre-tax profits of £45m.
The group, which has Waterstone’s and HMV stores in Huddersfield, said it now expected borrowings to be not less than £130m – significantly higher than expected.
Shares fell by 22% or 4.5p to close at 16.25p yesterday.
Simon Fox, chief executive of HMV, said: “Trading conditions remain tough, reflecting a difficult consumer environment as well 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 and sustainable future.”