Suppliers of music chain company, HMV, are facing insurance troubles and that has led to supply side constraints for the company. These suppliers are unable to get insurance cover for all their stocks which they have provided on credit.

While HMV claims that it is going to be no difficulty at all, there is no denying that many of the outside firms have struggled to get credit insurance and that is turning out to be a blow to the firm.

Since the retail consumers take time to pay the suppliers, they take insurance that provides financial security to the company as well as the distributors. And that saves them from retail collapse.

No wonder then that some of the suppliers have refused to provide material unless and until they get their necessary insurance cover. Post the news, the shares of HMV collapsed by 68 per cent over the last year mark.

Poor Christmas sales have already caused some of the lending agreements to collapse. News reports had said that some of the key suppliers have been trying for as long as some weeks for insurance.