HMV reports dire trading
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HMV Group has reported tumbling sales across the business in the face of a continuing weak market, as it agrees to sell book chain Waterstone’s.
Total sales across the group, including Waterstone’s, fell 16.6% in the three months to 30 April. Sales were down 13.7% for the year.
Like for like sales across the group were down 13.6% for the year and quarter.
HMV took the brunt of the fall with like for like sales for the quarter slipping 15.1%.
Waterstone’s like for like sales fell 8.4% during the period, down 3.8% for the year.
The group’s Live division, which includes live music venues and festivals, was the one bright spot in the business performance reporting a 15.7% rise in like for like sales across all venues.
HMV’s trial of increasing the space dedicated to technology also appears to be making an impact as trial stores have outperformed the rest of the estate.
The group has now closed 19 of the 60 stores earmarked for closure, 13 further HMV stores are due to close in the next three months.
The Group expects to report full year pre-tax profit of around £28.5m.
Readers' comments (3)
Anonymous | Fri, 20 May 2011 12:26 pm
It's baffling on the one hand that they can't make money when a £25 at an online retailer can be £52 at HMV in store. That's quite some margin!
Although maybe that's also their problem. I go in there, laugh at the prices and leave. If they offered a good price, would people use them to get the 'real shopping' experience.
Sadly I think HMV is broken, and it will slide into bankruptcy.
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Anonymous | Sat, 21 May 2011 1:14 pm
"baffling on the one hand that they can't make money " Hmmmm
The Group expects to report full year pre-tax profit of around £28.5m
Can you read of course they can make money.
you really have no idea what your talking about when you say it will go bankrupt,
think of the morgage on a house if you can make your morgage payments the bank will let you keep your house it wont force you to sell it, it is not in the banks intrest to capitalise a loan loss on a profitable company,
hmv will get a higher finance charge which instead of making 28 million it will make 25million the store closures are necessary to enhance profit in the short term. Profitablity will increase next year providing the weather is fine over Christmas, as a result of cost savings the debt has risen due to paying its suppliers in cash for inventory which in turn will be turned back in to cash on sale and debt reduced. or the banks can as you say put HMV into bankrupcy, force thousands of redundancys on a profitable company the banks don't want cash when the goverment is giving them more than they can lend. To say HMV business model is broken is very wrong you could have said that in 2007 ,08,09 and 10 but it still manged to make profits in excess of 70 million this is one the shorters have killed, the press have over reacted because someone somewhere is getting a bung to keep HMV down while the shorters exit their poistion hence the anti HMV rhetoric. Their is cash going through the tills and stock on the shelves means it here to stay at least for another 3 years,
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Anonymous | Mon, 23 May 2011 1:58 pm
Frankly I agree with the first post. Yes they may not disappear for many years but they are certainly failing from a retail perspective.
Waterstones is failing because customers can go to an online retailer and pay £5 for a book or even pop into Tesco and get it for £6 but waterstones wants to charge them RRP e.g. £8.99 minimum.
This is the same principle with HMV, I went to get a box set for a friends birthday, HMV instore were selling this for £50! online it was £17. There is not logic to there pricing and I am quite sure most of their sales rely on people giving Gift vouchers and the receipient spending them in store.
If you go in to buy a DVD, CD or game in a spur of the moment trip you will get ripped off 99.9% of the time.
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