HMV chief denies exit talk after profit alert

Click to follow
The Independent Online

Simon Fox, the chief executive of HMV Group, yesterday fended off City speculation that he is poised to quit the embattled entertainment retailer, as it unveiled another profit warning.

Sources have indicated that Mr Fox has hinted at a desire to depart after six turbulent years at the helm during which the company share price has collapsed.

Mr Fox moved to quell the talk, however. He said: "This is categorically not true that I have told the board I intend to leave."

The rumours are the latest upheaval at HMV, which yesterday posted a 12.9 per cent slump in underlying retail sales over the past 17 weeks.

Analysts say that the timing of Mr Fox's possible departure may be linked to the sale of HMV Live, which operates 13 venues and five festivals.

The group is thought to be in advanced talks with suitors to sell the live business for between £40m and £65m. This would enable the group to pay down a chunk of its debt of £168m, including loans to Lloyds Banking Group and Royal Bank of Scotland, which would put the company on a firmer financial footing and help to pave the way for Mr Fox's exit.

If it completes the sale of its live business, HMV could appoint headhunters to find a new chief executive. HMV expects to have made a pre-tax loss of £16m for the year to 28 April, compared with its earlier forecast of losses of £10m.

Mr Fox, who has led HMV since September 2006, said he was "very disappointed" with the results.

But HMV expects to make a profit of £10m this year, boosted by an uplift in video games helped by the demise of the market leader Game Group, which was rescued out of administration on 1 April.

Shares in HMV closed up 0.45p at 4.15p.