HMV Blames Weak Releases For Sales Slump
Shares in embattled entertainment retailer HMV have taken another tumble on the back of a further slump in sales.
The stock lost 11% in early trading before recovering some ground moments after announcing a 14.8% drop in sales over the 20 weeks to September 15.
Like for like sales, the comparable measure which takes in stores open for over a year, saw an 11.6% decline.
The firm blamed a quiet release schedule for its core music, DVD and games markets but envisaged a pick-up in trading for the rest of the year.
Its new chief executive Trevor Moore, who succeeded Simon Fox earlier this month, said: "The like for like decline was less marked towards the end of the period and we should be helped in the remainder of the year by a strong pipeline of new releases in the music, DVD and games markets ahead of Christmas."
HMV has been shifting its emphasis from fast-declining CD, DVD and games into the growth markets of new technology products.
It said sales of portable digital technology devices, products and services continued to grow strongly in the latest trading period.
HMV, which made a loss of £16.2m in its last financial year, has forecast a return to profit in the current year, reflecting disruption to rival computer games retailer Game and better terms with key music and film suppliers.
The firm, which earlier this year sold the Hammersmith Apollo for £32m, said it was still reviewing the remaining HMV Live business.
In the wake of the sales update, stockbroker Seymour Pierce said in an investor note: "We see no reason to change our sell recommendation and continue to believe there will be no let up in the structural pressures on the business from on-line or the supermarkets."
Its note continued: "We see HMV as a value trap with potentially insurmountable structural issues."