Fears of more losses at HMV

Kasmira Jefford
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HMV IS TODAY expected to reveal it has plunged further into the red as the troubled music retailer grapples with intense competition from the internet and waning CD and DVD sales.

Analysts have forecast first half losses of almost £40m for the six months to 29 October compared with a hit of £32m a year ago, warning that Christmas could be the “make or break” point for the firm.

At its interim results, HMV’s chief executive Simon Fox is expected to stress the progress made after revamping its stores to focus on boosting sales of consumer technology such as headphones and tablets.

The company, which issued three profit warnings and was forced to sell its Waterstone’s bookshops earlier this year, has been hit by rising internet sales, competition from supermarkets and digital downloading.

Its banks rescued the firm from near collapse and agreed to new £220m credit facility, giving HMV some time to turn itself around.

However, some analysts believe the company will need to raise equity in the new year to survive. There are also doubts as to whether HMV’s focus on consumer gadgets will improve trading in the long-term.

The debt-laden group plans to close 40 of its 256 stores this year.