British music and books retailer HMV Group issued a profit warning today as it announced a three-year plan to cope with tough competition from supermarkets and internet retailers.
The British firm, which runs music shops under its own name as well as Waterstone's bookstores, said it would run trials of a new HMV store format in the autumn and sell a wider range of portable digital products from suppliers like Apple.
It will also introduce a new loyalty card, increase marketing of its Web sites and aim to achieve £40 million sterling ($77.5 million) a year in cost savings by 2009-10. In the short term, however, trading will remain tough.
"Since the group's last trading update in January, trading conditions have deteriorated further, particularly in our overseas markets and at Waterstone's," HMV said.
"It (the board) now expects full-year profits to be below the current range of market expectations."
A spokeswoman said analysts' full-year profit forecasts ranged from £55 million to £65 million.