HMV to close 60 stores

HMV Group is to close 60 stores as it looks to “reshape” its business in the face of further falling sales and profits.

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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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