HMV says Blue Cross sale not related to banking covenants

HMV has downplayed speculation over discounting after an ITV business reporter suggested a blue cross sale might be a way of raising funds ahead of debt deadlines.

Announced earlier this week, the sale is set to take place in over 230 HMV stores across the UK and Ireland, starting from tomorrow (Saturday, January 12th) and running throughout the month.

The retailer slashing up to 25 per cent off a number of its product ranges, including video games, CDs, DVDs, books and technology products.

Following the news, ITV business reporter Laura Kuenssberg speculated on Twitter that HMV’s motives for the sale were to generate new funds in order to pay off looming debt deadlines.

However, HMV’s head of press and PR Gennaro Castaldo told MCV sister publicationPCRthat the rumours are unfounded and it’s business as usual for the retailer.

"We just thought we’d try something a bit different," said Castaldo.

"It’s a purely commercial event at a time of year when retailers have sales and promotions."

Whilst the newly-announced sale is in addition to the firm’s Boxing Day sale and has not previously been an annual event for the firm, it is not uncommon for HMV to announce discount events throughout the year.

Even so, the timing of the sale is unfortunate for the retailer, which announced back in December it would likely breach its financial covenants in January as it continues to tackle its mounting debt.

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