HMV's shock over high voltage show
HMV has lost a tenth of its value after warning that its push into live music events had failed to live up to its billing.
Struggling: HMV wants to tap into the live music scene
The books and music retailer acknowledged that its High Voltage festival had been a 'disappointment', with ageing headliners ZZ Top and Foreigner failing to draw big enough crowds to London's Victoria Park in July.
'Our expectations for a brand new, year-one festival were just too high,' said chief executive Simon Fox.
'What we did was overestimate the number of people who would come to an inaugural classic rock festival.'
The admission casts doubt on Fox's plan to revive the struggling High Street retailer (down 7.25p at 59.5p) by tapping into the buoyant live music scene.
Kate Calvert, an analyst at stock broker Seymour Pierce, said the live music wing 'may be a high growth story buy it lacks the scale to overcome the very immediate structural pressures the core retail business has from online'.
In a bid to counter the relentless falls in CD sales, Fox last year spent some £46m on Hammersmith Apollo venue owner Mama Group.
But his uninspiring debut in the concerts and festival world suggests that the chief executive will struggle to offset the flight of 89-year old HMV's music business to the internet. Underlying sales at its music store chain fell a massive 14.9% between May and September, which was even worse than City analysts had expected.
In common with other High Street bosses, Fox attempted to pin the blame for the dire performance on the World Cup, which had distracted customers' attention from books and CDs.
Fox is now pinning his hopes on a raft of new games, such as Fifa 11 and Call Of Duty Black Box, and the Playstation Move and Microsoft Connect motion sensor consoles to breath life back into the market. Compounding the misery for shareholders was the resignation of HMV's long-standing finance director, Neil Bright.
A glimmer of light came at HMV's Waterstone's books store chain, where trade is beginning to stabilise following a management cull earlier this year.
Underlying turnover fell by 2.6% over the period as sales of electronic books leapt by 70%, with more than 1m books downloaded via its website.
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