HMV hopes for Christmas to be its saviour

The beleaguered entertainment retailer HMV faces a critical two day of trading before Christmas Day that could play a pivotal role in shaping whether it survives on the high street.

The 238-store chain issued a “going concern” warning earlier this month and is being stalked by Apollo Global Management, the US vulture fund that has acquired more than 10 per cent of HMV’s debt.

Apollo is thought to believe that HMV can be turned around, if it can seize control and push through a radical restructuring. Its shops are likely to be packed today and tomorrow with shoppers hunting down last-minute DVDs – such as Batman: The Dark Knight Rises – CDs and headphones but its reliance on sales around Christmas has left its future looking precarious.

Following a 10.2 per cent slump in sales, HMV suffered a loss of £37.3m over the half-year to the end of October and warned it would almost certainly breach banking covenant tests in January. Its chief executive Trevor Moore has insisted it has a “ strong future” and that regular discussions with its banks are “ constructive”.