HMV Issues Profit Warning For Second Time, Things Looking Grim

UK retailer HMV has issued a second warning that its profits will not hit market expectations this year.

The parent company HMV Group (which also owns Waterstones) said profits would be “moderately below” the £45 million that was predicted. This warning marks that the company is still facing troubles, even after it moved to close 60 stores after a 13% drop in sales in the five weeks ending January 1st 2011.

The company has noted that it will be at least £130 million worth of debt for this financial year.

HMV SEO Simon Fox said that “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.”

Former HMV competitor Zavvi failed in April 2009 leaving HMV the only major retailer offering the same products. Others, such as Woolworths also failed under the strain of the recession and the continuing rise of online retailers, something HMV will also suffer from.