Ailing retailer HMV have reported that like-for-like retail sales have dropped by 13.2 per cent compared to last year in the run up to Christmas.
The shocking figures have left the company with an uncertain future following warnings from the City that forecasts for the company to break even this year now looked optimistic.
Not only have the company had to face a decline in sales in the weeks leading up to December 17, but also the news of the retailers pre-tax almost doubling to £45.7million in the half-year to October 29, in comparison to £24.7million.
After recently selling bookseller Waterstone’s, the group have announced it would be placing HMV Live – which operates 13 venues and a number of festivals – under strategic review and could lead to its sale.
The retailer, which own 252 stores in the UK said its shift in focus on technology was paying off, after 144 stores were refurbished to reflect the new emphasis. Like-for-like sales of headphones, speakerdocks and tablet computers were up 144 per cent compared to last year.
However, HMV said in its core markets – music, visual and games – as a result of store closures it lost market share.
Following the announcement of the groups £10million cost savings plan, 60 stores are set to close, and 15 will be shut in the first half of the New Year.
By selling Waterstone’s and HMV Canada, this enabled the group to raise £55million ensuring a £220million refinancing deal with its leading banks.
Simon Fox, Chief Executive admitted that HMV had seen ‘a challenging start’ to the new financial year.
He said: “We have take decisive action to restructure the business and are now seeing the benefits of this, particularly in our technology products business”.
“Like all consumer-facing companies we are facing tough trading conditions but we continue to push forward through this period. We remain well prepared for the key trading days ahead”.
Article by Charlotte Greenhalgh