HMV to close 60 stores
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HMV Group is to close 60 stores as it looks to “reshape” its business in the face of further falling sales and profits.
- Read Rosie Baker’s opinion here
The Group, which also owns book store chain Waterstone’s, reported that sales over the festive period fell 10.2%, excluding its Live entertainment division.
The entertainment and book retailer says that the “challenging entertainment markets” and pre-Christmas snow undermined sales during the peak trading period and that the expected improvement on first half sales at HMV “did not materialise”.
HMV has previously said that it takes 60% of its full year sales in the second half of the year, which includes Christmas.
Waterstone’s, however, reported improved like for like sales, down only 0.4% for the five weeks to 1 January, which the group says “reflects the success of the turnaround” strategy started in 2010, which has seen its marketing team restructured and a new brand identity introduced.
HMV says it is taking “aggressive action” to manage costs and has also identified a further £10m of annual cost savings from across the business but expects that full-year profit will be at the lower end of expectations.
Simon Fox, HMV Group chief executive says the result demonstrate the need to continue with its diversification strategy which have seen the group move into live music, festivals, digital services, cinema and fashion.
“Whilst HMV has had a challenging year to date, it remains a profitable and cash-generative business and a powerful entertainment brand. The pace of change in the markets in which we operate underlines the urgency with which we must continue to transform this business,” he says.
Separately, high street fashion retailer Next, has reported that the snow in December cost it £22m in Christmas sales. Store sales for the five months to Christmas Eve were down 3.1% while online sales were up 8.7%.
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Readers' comments (11)
Anonymous | Wed, 5 Jan 2011 10:43 am
I have always found that HMV have some of the longest queues, and a recent visit just before Christmas to the Redditch store found a queue of about 30 people and 2 staff on the tills.
This meant that you couldn't actually get to a main section of the store as cut off by the queue and then the prospect of a long wait to pay for a CD, hence (as many other people appeared to be doing) I went to another store.
The demand appeared to be there (despite the weather) just not the ability to process it!
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Anonymous | Wed, 5 Jan 2011 11:06 am
When I can by a particular boxed set of DVDs for £41 from WH Smith, £34.99 from Play.com why would I go to HMV and pay £99.99 for the same item??!! BBC Miss Marple Complete Collection (Joan Hickson) if you want to check it out.
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Anonymous | Wed, 5 Jan 2011 12:08 pm
I've always found HMV's prices to be higher than any other retailer (and much higher than e-tailers like Amazon), add to this the invariably long queues and you'll understand why I haven't shopped there for several years.
HMV need to focus on the customer experience of buying in their stores as well as price matching.
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Anonymous | Wed, 5 Jan 2011 12:29 pm
With the advancement in music technology.. i.e. online downloads etc
It works out cheaper and quicker for online shoppers.
It doesnt take an expert to work out that in less than 18 months from now - there will be no music high street companies left selling music CDs in shops. This technology will be phased out by then.
The future for music is digital and its online.
And to think the cost of having to pay business rates, high rental fees with 20% and other outgoing cost just to bank a few quid in today's harsh economic climate is now a reality for companies like HMV and others to follow....Its a dying market and customer music buying habit has moved on.
So a wise move by HMV to cut their loses whilst they are still floating as a music business I do have to say HMV priced themselves out of the high street market. The prices they charge for all their CD/DVD, other consumer accessories is like 100% - when savvy shoppers can get the same deal some place else for 50%.
I will be glad to see HMV sell music online only and for go the shop front presence..it makes sense for everyone sake including the HMV...
Way to go HMV ! it will turn out great long term.
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Michelle Reece | Wed, 5 Jan 2011 1:07 pm
HMV has been whittling it's music stock down to make room for clothing. I've always known HMV as a music store. With the closure of the Virgin/Zavvi stores why would you reduce this stock and diversify into a crowded market? Look at what you sell and market it more effectively. Blaming the snow is the easy option.
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Anonymous | Wed, 5 Jan 2011 1:28 pm
I agree! Blurays at HMV are rediculously overpriced. An old film such as Die Hard is around £25 when you can get it for about £12 from Amazon.
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Anonymous | Wed, 5 Jan 2011 2:14 pm
Im not surprised at this news, and before the industry starts blaiming illegal downloads as the reason for poor shop sales perhaps they should take a long hard look at the real problem with HMV, as stated in a previous post HMV is one of the most expensive places to buy music,games and dvd's, even Tesco can beat HMV prices! If HMV spent less time trying to have trendy stores with trendy staff and more time on realistic pricing this might not have happened!
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Bob | Wed, 5 Jan 2011 2:33 pm
Spent some time in Sheffield HMV yesterday trying to locate the classical music section. It turned out to be a mainly empty single section of a row with very 'run of the mill' choices mostly of current singers and performers rather that composers and most notworthy for all the omissions rather than inclusions. Went on internet when I got home which was substantially more rewarding.
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Anonymous | Wed, 5 Jan 2011 4:50 pm
You are all forgetting the realityfor many of HMV'S employees, even if there are only ten staff per store this is 600 jobs that are to go and 600 people out of work.
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rick.pullan | Thu, 6 Jan 2011 12:49 pm
if they could get the instore experience and pricing right for the actual, not desired, target market, there is a place for them, there are many people who want to browse through different music & film genres. same thinking discipline for online
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