HMV has received a boost from the music industry after the bosses of several major record labels pledged their support for the under-pressure chain.
In a letter to the Times newspaper, the seven leading executives praised HMV’s contribution to the music industry and said its “unique approach” played a vital role in breaking new artists.
Their intervention comes a day after it emerged that some of HMV’s suppliers were being hit by a reduction in credit insurance due to fears over the chain’s trading position.
HMV has reportedly appointed to KPMG to advise it on negotiations with its banks after revealing in a profits warning two weeks ago that it was in danger of breaching its banking covenants.
The executives pledged to support the company through its current difficulties and said nothing has changed in each of their individual trading relationships.
Signatories included David Joseph, chairman and chief executive of Universal Music UK, Ged Doherty of Sony Music UK and Christian Tattersfield, chief executive of Warner Music UK.
They said: “We are each continuing to supply HMV with our music and they are continuing to do much more than sell it; their unique approach plays a vital role in breaking new artists and supporting British culture in the broadest sense. HMV is at the heart of our industry and they have full support from each of us.”
The industry has already lost two major high-street outlets for its music following the demise of Woolworths and Zavvi. However, HMV rejects parallels with the previous casualties by pointing out that it remains profitable and continues to generate cash.
Without insurance cover, HMV’s suppliers are trading at their own risk but HMV sought to assure over the impact of the insurance situation.
It said: “Whilst this has resulted in the reduction in the availability of credit insurance to certain of the company’s suppliers, our business remains a core channel to market for them. We continue to maintain excellent relations with our suppliers and have had no difficulty in obtaining stock.”