HMV sales slow but losses are reduced

MUSIC retail chain and Waterstone’s owner HMV has signalled slowing sales despite narrowing first-half losses.

MUSIC retail chain and Waterstone’s owner HMV has signalled slowing sales despite narrowing first-half losses.

The company reported like-for-like sales of 5% across the group in the 26 weeks to October 27- slower than the 6% growth seen in the first 18 weeks.

HMV, which has been hit by online music downloading and competition from supermarkets, reduced underlying operating losses 13% to £24.8m.

It has sought to recover through moves such as cost-cutting and an overhaul of its stores. It said early customer reaction had been "encouraging".

HMV gave no update on current trading but said it approached the crucial Christmas trading season in "good operational shape". The latest figures revealed like-for-like sales growth easing back slightly at HMV’s main UK & Ireland operation to 9.2%, although the firm boasted a 68% increase in online sales and the chain cut operating losses to £12.3m.

The Waterstone’s books chain came under more pressure, with sales falling back to 1.4% – compared to 2.7% up to the beginning of September – despite the boost earlier this summer from sales of the final Harry Potter book.

HMV chief executive Simon Fox’s overhaul of the group is focusing on introducing higher-growth technology products such as MP3 players into stores, supply chain savings, and marketing moves such as the introduction of a Waterstone’s loyalty card taken up by around 700,000 members as of the end of October.

It commenced trials of new format "next generation" stores – which include features such as refreshment and game-playing zones – at Birmingham’s Merry Hill shopping centre and Tunbridge Wells in Kent in September.

Mr Fox, who also sold off HMV’s Japan operation earlier this year for £70.6m to focus on the core UK business, said: "Though there remains much more to do, we are pleased with the progress made on our strategic initiatives."

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