Wednesday, January 19, 2011

Gennaro Castaldo Watch: but if you do hear of anything going...

The HMV spokesperson stood on the burning deck, his heart was all a-quiver....

Don't panic! cries Gennaro:

Gennaro Castaldo, a spokesman for HMV, said: “In light of recent comment on credit insurance cover, HMV Group wishes to clarify that, following the peak trading period, credit insurers are reviewing the level of cover they provide on the group. While this has resulted in the reduction in the availability of credit insurance to certain of the company's suppliers, our business remains a core channel to market for them. We continue to maintain excellent relations with our suppliers and have had no difficulty in obtaining stock.”
Here's the problem, though, Gennaro - you're relying on these companies deciding that you're such a valuable channel to reach consumers, they're prepared to risk doing business with you even though you're a bad risk.

But you're a bad risk because the insurance companies don't believe you're good for credit (and there is a fair question about what sort of insurance company won't provide cover once they look like they might have to pay out).

And they think you're not good for credit because your sales are down.

And if you sales are in freefall, how much longer will entertainment companies view you as a valuable channel to reach consumers?