Embattled retailer HMV revealed further trading woes today as it warned it would miss profit targets for the second time this year.
The music and books retailer also admitted it was set to breach certain terms of its bank loan and had opened talks with lenders in the hope of amending its banking terms. It said lenders continued to be "supportive".
Given the scale of the challenges facing the firm, HMV said its chairman of two years, Robert Swannell, who was recently appointed to the same role at Marks & Spencer, was to be replaced by senior independent director Philip Rowley.
HMV said trading conditions had not improved since its last update in January, when it warned that tumbling sales over Christmas would leave profits at the lower end of market expectations.
The group, which also owns the Waterstone's book chain, said it now expected to miss forecasts for £45 million in underlying pre-tax profits.
The group said it now expected borrowings to be not less than £130 million - significantly higher than expected.
Shares plummeted another 23% on today's grim news.
Simon Fox, chief executive of HMV, said: "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."
It hopes to secure new banking agreements that give it more headroom in the current trading conditions and support its strategy.
The group is closing 60 stores over the next 12 months and shedding jobs, with aims to cut costs by another £10 million a year.
It saw sales plunge 13.6% in the UK and Ireland over Christmas, and has since also been hit by supplier troubles as they struggle to gain credit insurance amid fears over HMV's trading.
Speculation is mounting over HMV's plans for a sale of Waterstone's to raise funds and reduce debt, with reports that the book store's founder, Tim Waterstone, is teaming up with Russian billionaire and HMV shareholder Alexander Mamut to launch a bid.
The group said Mr Swannell was stepping down in light of the time commitments required at HMV.
He said: "I have recognised that the time requirements for the chairman of HMV have changed. I care deeply about this business and the team which leads it."
He will remain as a non-executive director.
Its new non-executive chairman, Mr Rowley, was previously chairman and chief executive of AOL Europe and former group finance director of B&Q parent Kingfisher.
HMV has faced increasing competition from online retailers and supermarkets in its core CD and DVD markets in recent years.
The group has been broadening its product mix as part of a fightback, branching into new areas such as technology and entertainment-related product sales.
Its swoop for festivals and gig venue owner MAMA Group also cemented its position in the fast-growing live market.
But it has said recently that problems have been compounded by weak entertainment markets.Reuse content