STRUGGLING BRITISH entertainment retailer HMV is pinning its hopes of survival on a shift in emphasis from CDs and DVDs to growth markets such as headphones and tablet computers after a sharp fall in Christmas sales.
Shares in the group, which last month posted wider first-half losses, warned it was in danger of going out of business and put its HMV Live music venue division up for sale, fell nearly 7 per cent after it said sales at stores open over a year plunged 8.2 per cent in the five weeks to December 31st.
That was an improvement on like-for-like sales down 13.2 per cent in the seven weeks to December 17th but largely reflected an extra Saturday (December 24th) of Christmas trade this year.
Saddled with £164 million of debt the 91-year old firm, which trades from 256 stores in Britain and Ireland, employing 4,500, is suffering as a downturn in consumer spending accelerates the long-term decline of its core CDs and DVDs markets.
HMV, famous for its Nipper the Dog trademark, is also facing intense competition from internet retailers and the rise of digital downloading as well as the march of grocers such as Tesco into general merchandise ranges.
But despite reiterating that “material uncertainties” may cast doubt on the firm’s ability to continue as a going concern in the future, chief executive Simon Fox said he was actually optimistic about the group’s prospects.
“We still feel confident in the future of the business and the fact that it’s going to be around for some time to come. We’re heading in the right direction and we have a supportive group of stakeholders,” he told reporters, noting constructive dialogue with its bankers and suppliers.
Fox highlighed 144 stores refitted with an extended technology range of portable digital products, which delivered an increase in technology like-for-like sales of 51 per cent in the five-week period.
He said the firm sold 500,000 pairs of headphones in December and 20,000 tablet computers.
Prior to Monday’s update shares in the firm, the last national music and movies chain on Britain’s town centre shopping streets, had lost 88 per cent of their value over the last year. – (Reuters)
