HMV Reports Further Losses, May Sell Live Division to Boost Finances
HMV Reports Further Losses, May Sell Live Division to Boost Finances

Struggling U.K. music retailer HMV has reported a further fall in retail sales for its first quarter, but remains optimistic that its new tech-led strategy shows the way to recovery.

Like-for-like sales for the 18 weeks ending September 3 2011 dropped by 15.1% from the same period the previous year, according to the company's latest financial figures, which were released today (Sept. 9). Total HMV retail sales, comprising the results of HMV U.K., Ireland, Hong Kong and Singapore, were down 21.8% on the comparative period. The closure of 29 U.K. stores during the same period was cited as a key contributing factor in the sales drop. Total sales for HMV Group, which includes its live arm, HMV Live, slumped 19.4% on 2010 Q1 results.

Despite the alarming figures, which were in line with City forecasts and remain broadly unchanged from the previous quarter, the company pointed to a 100% rise in like-for-like sales in its six "Fast Forward" stores, which place a greater focus on technology products, such as tablet computers, MP3 players, speaker docks, headphones and Blu-ray hardware. As previously reported, HMV trialled a wider tech provision in six stores in the first half of 2011. The company, which reported a net loss of £121.7 million (then $195.6 million) in its fiscal year ended April 30, plans to roll out its enhanced tech offering to 150 stores across the U.K. and Ireland, with all store refits due to be completed by the beginning of October 2011.

HMV Live, which includes ownership of 13 U.K. venues and a number of British festivals, including Lovebox and Global Gathering, also reported a 20% increase in attendance figures on a like-for-like basis. Overall attendance for HMV's live operations was up 30% in total, while the company's latest live venue, the 1,500-capacity HMV Manchester Ritz, opened earlier this week (outside the first quarter).

HMV's Profits Plunge, More Challenges Ahead

"Overall, our plans for the Christmas trading period are on track, and we are focused on providing HMV customers with the very best offers across all of our product categories and live venues," said HMV Group chief executive Simon Fox said in an interim management statement.

Fox also noted that 2011 has seen the company successfully complete "the disposals of HMV Canada and Waterstone's," as well as "entered into revised term and revolving credit facilities of £220 million with its lending banks." On June 27, HMV announced the sale of 121 Canadian stores to restructuring firm Hilco U.K. for £2m, having sold the book chain Waterstone's TO A&NN Capital for £53m the month prior.

"Following the achievement of these critical steps, the Group is highly focused on its turnaround plans," Fox went on to say. HMV also today announced the appointment of Mark Hodgkinson as Marketing & eCommerce Director. Former eCommerce Director Steve Napleton is to leave the company.

"I would very much like to welcome Mark to HMV, who will bring with him tremendous marketing experience and expertise gained across a number of industry sectors and market-leading companies, most notably in the area of loyalty, online and digital, which are key areas for HMV as we continue our transformation into a broad-based entertainment brand operating across a number of channels," said Fox in a statement, before adding his "sincere thanks to Steve Napleton for his contribution to HMV, and to wish him well in his future endeavours".