HMV reports another plunge in sales

The boss of struggling entertainment group HMV today vowed to press on with plans to overhaul its technology offering as he reported another plunge in sales over the summer.

The boss of struggling entertainment group HMV today vowed to press on with plans to overhaul its technology offering as he reported another plunge in sales over the summer.

HMV chief executive Simon Fox said the first six “Fast Forward” stores - where up to 25% of floor space is devoted to gadgets such as iPods and tablet computers – recorded a doubling in like-for-like sales in the 18 weeks to September 3.

Mr Fox said HMV would this month continue to roll-out these space changes at the majority of the retailer’s 150 stores after unveiling a 15.1% decline in like-for-like sales across the HMV Retail network.

Elsewhere, HMV, which earlier this year sold book chain Waterstone’s and HMV Canada in order to seal a deal with its lenders, saw a 19.4% drop in total group sales, which includes its concert arm HMV Live.

The results cap a poor week for retailers after Argos and Homebase owner Home Retail Group, PC World and Currys parent Dixons Retail and chocolatier Thorntons all revealed falling sales amid a tough consumer environment.

HMV is making a substantial investment in promoting its Fast Forward stores as it battles to reverse declining sales in the run-up to Christmas.

The new format, which will be promoted in and out of stores under the “Play it, touch it, live it” strapline, could be seen as a risk as consumer electronics retailers such as Dixons Retail and Comet owner Kesa have struggled this year.

Mr Fox added: “Overall our plans for the Christmas trading period are on track and we are focused on providing HMV customers with the very best offers across all of our product categories and live venues.

HMV, which is closing up to 60 stores in a bid to make £10m (€11.5m) of cost savings, said it had closed 29 stores in the 18-week period.

Elsewhere, HMV Live saw a 20% increase in like-for-like attendance figures over the summer period and on September 6 the new 1,500-capacity HMV Ritz opened in Manchester.

The group reported a slump in profits in the year to April 30 to £2.6m from £67.3m as sales deteriorated throughout the year.

The sale of Waterstone’s and HMV Canada raised the group £55mand ensured a £220m refinancing deal with its lending banks.

Shares in HMV opened 6% lower after today’s update.

Freddie George, retail research analyst at broker Seymour Pierce, said the figures were in line with expectations but “nevertheless remain very weak”.

Mr George said the Fast Forward plans were “not strong enough to drive footfall and earnings” and maintained full-year profit forecasts of £2m.

More in this section

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up