HMV warns on profit, to revamp stores

Music and books retailer HMV Group Plc issued a profit warning yesterday as it announced the outcome of a strategic review aimed at coping with tough competition from supermarkets and the internet.

The British firm said it would launch a new store format in the autumn and sell an improved range of portable digital products, as well as introducing a new loyalty card and increasing marketing of its websites.

"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 in a statement. "It now expects full year profits to be below the current range of market expectations."