Tough trading conditions take their toll on HMV as it announces 20% sales drop
Retail sales at HMV have fallen by nearly 20% as it a total group loss after tax of £50.1m.
The interim annual financial results for the high street retail group highlight the fall in sales of 19.4%, with like-for-like sales down by 11.9%, faling from £442.7m in 2010 to £364.9m this year.
As a result, HMV Group has seen a growth in its underlying debt to £163.7m, despite HMV live increasing its operating profit to £3.4m from £1.5m last year. The group has now launched a strategic review which could lead to sale of this division.
2011 saw 144 stores refitted with portable digital products, which grew technology sales by 42%, while the sale of headphones, speakerdocks and tablets has also risen by 147% since then.
Despite these results, the company has said that its board is confident that it will have ‘adequate resources’ to continue to operate for the foreseeable future, although the economic environment and trading circumstances meant that ‘material uncertainties’ had ‘cast significant doubt’ over the group’s ability to continue in the future.
Simon Fox, chief executive of HMV Group, said: “This has been a challenging start to the year. However, we have taken decisive action to restructure the business and are now seeing the benefits of this, particularly in our Technology products business. Like all consumer-facing companies we are facing tough trading conditions but we continue to push forwards through this period. We remain well prepared for the key trading days ahead."