HMV confirms Waterstone's sale could go ahead
Share
HMV has confirmed that it is considering selling off the Waterstone’s chain as part of its turnaround strategy.
The entertainment retailer also says it is considering selling its HMV Canada business.
In a statement to shareholders HMV says it is “exploring strategic options in respect of Waterstone’s and HMV Canada” but maintains that nothing has been decided and a sale may not go ahead.
It went on to reiterate that: “The Group’s lending banks continue to be supportive, our banking facilities remain fully available and the Group is continuing to maintain a regular and constructive dialogue with its lenders.”
Selling the bookstore chain is one option the retail group is considering in order to raise cash in return for a relaxation of its lending covenants to avoid breaching certain terms of its bank loan.
HMV has issued two profit warnings this year and expects to miss its target of £45m in full-year underlying pre-tax profits.
Other options HMV is thought to be considering to raise cash include further store closures, it is already planning to close 60 stores, or a share issue.
Tim Waterstone, the book chain’s founder has been cited as a possible bidder for the chain. As has Russian investor Alexander Mamut, who has increased his stake in HMV Group to 6% in the past three months.
Readers' comments (2)
Harold Birtwistle | Fri, 25 Mar 2011 2:30 pm
HMV records and Waterstones are two complementory businesses and both are on the high street.
Why don't they combine in each area and cut overhead significantly?
Unsuitable or offensive? Report this comment
Anonymous | Sat, 26 Mar 2011 4:20 am
The HMV brand is important, and it is a great business. HMV Canada, their flagship store has been one of the best businesses in Toronto.
It would have been nice to have seen the parent company to have been a lot more active with the business, and it could have stocked more UK import items.
Unsuitable or offensive? Report this comment