12th Sep 11
HMV reports further plunge in sales
by Adam Richards
Summer sales down at HMV
Summer sales down at HMV
The boss of embattled HMV vowed to continue with plans to revamp its technology offering while announcing another fall in sales during the summer.
The company’s chief executive Simon Fox revealed that the first half dozen “Fast Forward” outlets – where as much as 25 per cent of floor space is for gadgets such as tablet computers and iPods – achieved a doubling in like-for-like sales over the 18 weeks leading up to 3 September.
Mr Fox insisted that HMV would continue to introduce these space changes at most of the company’s 150 shops after unveiling a decline of 15.1 per cent in like-for-like sales in the HMV Retail network. The retailer, which sold HMV Canada and book chain Waterstone’s earlier in the year in order to reach an agreement with its lenders, suffered a fall of 19.4 per cent in overall group sales.
The results come on the back of Homebase and Argos owner Home Retail Group, Currys and PC World parent Dixons Retail and Thorntons all revealing declines in sales amid a difficult consumer environment. HMV is injecting considerable funds into promoting its Fast Forward outlets as it fights to reverse falling sales in the build-up to the busy Christmas period.
The new format, to be promoted both in and out of shops under the slogan “Play it, touch it, live it”, could be viewed as a risk as electronics retailers such as Comet owner Kesa and Dixons Retail has found times tough this year. Mr Fox went on to say that overall their plans for the Christmas period remain on track and that they are focused on providing customers of HMV with the best offers across all their live venues and product categories.
HMV, which is shutting up to 60 stores down in an effort to make £10m in cost savings, confirmed it had shut down 29 stores during the 18-week period. Meanwhile, HMV Live saw an increase of 20 per cent in like-for-like attendance numbers during the summer period and the new 1,500-seater HMV Ritz opened in Manchester on 6 September.
The group revealed a fall in profits over the year to 30 April from £67.3m to £2.6m as sales got worse as the year went on. The sale of HMV Canada and Waterstone’s raised £55m and ensured a refinancing deal worth £220m with its lending banks.
Freddie George, a retail research analyst at Seymour Price, said that the figures matched expectations but remain very weak. He went on to say that the Fast Forward initiative would not be strong enough to drive earnings and footfall and maintained full-year profit predictions of £2m.
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