HMV Meets Its Bankers

While HMV chief exec Simon Fox is confident he’ll be able to negotiate terms with the retailer’s bankers, the former owner of the failed Borders chain has warned that he’s in for an “incredibly tough battle.”

Fox’s March 17 speech at the Retail Week conference in London March 17 had HMV shares jumping 32 percent from 11.5 pence to 15.25 pence, but former Borders chief Luke Johnson told The Daily Telegraph that High Street retailing of entertainment products “no longer stacks up.”

HMV has issued three profit warnings and is in talks with a consortium of eight lenders because it needs to raise £75 million to satisfy its bankers.

Fox is “very confident” that the talks will reach a satisfactory conclusion but admitted it may take some time.

“It’s a process that is a complex process, it is a rigorous process but it is a positive process. It will take some weeks, possibly months to renegotiate the terms of our facilities but it’s moving in the direction we were hoping to move in,” he told Reuters.

Fox is reportedly weighing up his options, which will likely include issuing more shares, closing more HMV branches, or hiving off the Waterstone’s bookstore chain.

Johnson predicts HMV’s next problem will be obtaining credit insurance.

“I think they can get insurance currently but I fear that pretty soon that will get pulled,” he said.

Fox has also been critical of the media speculation on the future of HMV.

“Our premature death and our problems are being much written about and that’s very, very destabilising,” he said.