Jobs fear as HMV can't pay bank loans

MUSIC store HMV is at the centre of fresh job fears after it was revealed today it can't pay bank loans following a six-month sales slump.

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The entertainment group is in talks with bankers amid worries about its future after announcing half yearly losses of £36.1million.

Although losses have been cut by £14m compared with trading figures for a 26-week period ending October 27 last year, the chain admitted it was unlikely to meet the terms of existing bank loans next month and April.

Chief executive Trevor Moore said closing more stores or placing the business into administration is not "part of our plan", but the financial woes have triggered new fears about HMV's future.

There are 238 HMV stores across the UK, including four in Glasgow – Argyle Street, Buchanan Street, the Fort and Silverburn shopping centres – and also at Braehead and East Kilbride.

HMV said like-for-like sales fell 10.2% in the 26 weeks to October 27 as its pre-tax loss narrowed to £36.1m, against £50.1m the previous year.

HMV shares fell 39% today, giving the retailer a market value of just £10.1m.

Suppliers, including Universal Music, came to HMV's rescue last January with a deal that helped the retailer shed some of its huge debt pile.

Music publishers and film studios are keen to see HMV survive as internet retailers such as Amazon chip away at their profit margins.

It is understood HMV has secured improved access to music and film suppliers' back catalogues and is buying stock on consignment, meaning it pays only for products if it sells them.

HMV's struggle has seen it sell off several parts of its business, including the Waterstones book retailer, to reduce its debt pile, while closing loss-making stores.


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