In a statement released to the city today, HMV has revealed the results of a comprehensive review of its business.

Among many other new projects, the retailer plans to roll out a new store format by Autumn, launch a new social networking site for its consumers and make HMV.co.uk 20 per cent of overall HMV UK sales by 2010.

The board identified three main areas of focus, that of saving through cost cutting, protecting its core business while also growing new revenue channels. The chain plans to have achieved cost savings of £40m per annum by FY 2009/10 by simplifying supply chains and reviewing its UK store portfolio - which could lead to closures on the High Street.

“The three-year transformation plan which I will outline today is exciting, radical and far-reaching,” said a candid HMV chief executive Simon Fox this morning. “There is a great deal to do and I have every confidence that this plan will turn the business around.”

Despite the launch of PS3 on March 23rd, the HMV board also stated that it has taken “a cautious view” for the coming year and “expects full year profits to be below the current range of market expectations.”