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HMV bullish despite sales slump

By This Is Money
Updated: 11:28 EDT, 9 September 2010

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HMV's sales slumped nearly 15% after the World Cup scared off new releases, and the gaming market remained weak.

HMV: Hopes Christmas sales will boost profits

Despite the drop in like-for-like sales for the 19 weeks to September 4, the retailer said stores were in good shape ahead of the peak Christmas season.

In a turnaround launched by chief executive Simon Fox, HMV has pushed into fashion, mobile phones and Blu-ray discs, while its swoop for festivals and gig venue owner MAMA Group cemented its position in the fast-growing live market.

Shares fell 8p to 58.5p.

'It is too early for the effects of its new strategy, announced in March, to be felt, though so far, we remain unconvinced,' says Kate Calvert at Seymour Pierce, cutting her recommendation from buy to sell.

Like-for-likes sales at its wholly-owned music venues were up by 8% in the period but festivals were below expectations due to disappointing attendance at the inaugural High Voltage event at Victoria Park in London.

HMV also reported signs of turnaround at its Waterstone's book business after a 2.6% drop in like-for-like sales bettered City expectations.

The firm has addressed supply chain problems and is refocusing stores on local customer demand and the chain's specialist market position.

HMV is reportedly under pressure from shareholders to sell the business amid speculation that founder Tim Waterstone may want to take it private.

Mr Fox said all parts of HMV's strategic plan, including the turnaround of Waterstone's, were on track.

'These initiatives, combined with a stronger product line-up, particularly in games, are key to the delivery of a successful Christmas,' he added.

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