HMV shares tumble over credit concerns

Shares in HMV Group have dipped 8.5 per cent after it emerged insurance on its goods have been cut.

A big UK distributor admitted its sales to HMV are now uninsured, reports the BBC. The reason behind this was not revealed.

In a statement HMV said: Credit insurers are reviewing the level of cover they provide on the group.

Whilst this has resulted in the reduction in the availability of credit insurance to the company’s suppliers, our business remains a core channel to market for them.”

A HMV spokesperson told The Guardian: HMV continues to maintain excellent relations with all of its suppliers. The company has had no difficulty obtaining stock.”

Credit insurance is taken out by suppliers to cover payments owed to them by customers. Insurance companies can lower credit limits if they are concerned about a retailer’s ability to pay back debts.

The news comes following HMV’s announcement that it is to close 60 stores by 2012.