HMV reports grim trading but confident in new strategy

HMV Group reports like-for-like sales plunged 11% for the first half of its financial year, as it seeks to transform itself into a broad-based entertainment brand.

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HMV UK & Ireland saw like-for-like sales drop 16.1% for the six months to 23 October 2010.

The group, parent company of both HMV and Waterstone’s, also warns that the severe weather of the past two weeks has affected visits to stores as the key Christmas trading period begins.

The second half of the year, including Christmas, accounts for 60% of HMV’s full year sales.

Chief executive Simon Fox says:” The increased seasonal loss reflects the tough trading conditions in HMV UK, where good progress in growing new product categories was not sufficient to offset weak entertainment markets.

“In Waterstone’s, the recovery plan is on track, and in all businesses we are very well prepared for the important weeks ahead, with a strong line-up of offers across all product categories and a focus on delivering high quality service both in-store and online.”

The Group’s pre-tax loss widened to £41.3 m from £24.9m for the same period in 2009. Total sales fell 6% to £749.5m for the six months, year on year.

However, the company says that its strategy to broaden its revenue base is making “continued progress” with new products increasing to 12% of sales, compared to 9% last year.

HMV also now owns a string of live music venues after buying the Mama Group for £46m last December. It also offers a fashion range of clothing and plans its own branded line.

The company is selling its store at 330 Oxford Street for £13.75m.

HMV won the Loyalty category at the Marketing Week Engage Awards this year. Read an interview with group marketing director Graham Sim here

Find the entry form for the Engage Awards 2011 here

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