Retailer suffers from bad U.K. conditions.
Shares in HMV plunged after the British entertainment retailer reported today (Sept. 28) that sales in the U.K. have suffered in the past four months, due to the deterioration of trading conditions following the terrorist bombings in July.
HMV disclosed that, in the 21 weeks since May 1 of this year, total sales at HMV UK & Ireland fell by 3.7% year to date. Overall, group sales were flat for the period. HMV shares fell almost 10% today to 214p ($3.78).
Meanwhile, HMV's operations in Canada "continued to perform strongly," with total sales up by 10.6% for the period. At HMV Asia Pacific, sales grew by 10.1% at constant exchange rates in the first 21 weeks.
The announcement was made at the British retailer's annual general meeting in London today. It was also disclosed that HMV has disposed of its Australian stores.
Speaking at the AGM, HMV Group chairman David Kappler said, "Conditions for high street retailing in the UK have been tough during our financial year to date, and there are few signs of an improvement."
HMV said that the group was "aggressively managing our variable costs," forecasting like for like costs to be approximately 2 to 3% below the previous year.
HMV added that despite difficult trading conditions, it remained committed to its expansion program in the U.K. HMV has a target of at least 25 new stores for the full financial year. So far, 15 new stores were opened since the beginning of the fiscal year.
"In the meantime we are taking the right actions to reduce costs," said Kappler, "and to ensure that we are well positioned for the important Christmas trading period, where we look forward to new CD albums from Robbie Williams and Franz Ferdinand, 'Star Wars Episode III' and' War of the Worlds' on DVD, Microsoft's Xbox 360 games console and new books from Zadie Smith, Alexander McCall Smith, Jamie Oliver and John Peel."