Like-for-like sales slipped 12% in the year to the end of April amid cut-throat online competition. HMV said the market for games, music and films on DVDs or CDs have all shrunk between 10% and 20% over the year as more people download content from the internet.
But HMV isn’t throwing in the towel just yet. The group, which has 252 stores, expects profits of at least £10m this year as it continues to push sales of iPads, tablets and wireless headphones and shifts the focus away from CDs and DVDs. Sales of electrical devices now represent 11% of its business after a redesign of 144 stores – and another 25 stores will also be revamped in coming months. The troubled music retailer has also offloaded its Waterstones book chain and Hammersmith Apollo venue in the last year to get to grips with its £170m debt pile.
This might go some way to reassuring investors, who have been feeling increasingly uncomfortable after the recent departure of two of HMV’s top executives. Earlier this month chief executive Simon Fox announced he was quitting and just days later finance director David Wolffe followed. It wasn’t exactly a demonstration of confidence for the music retailer, which under Fox has watched its share price collapse from 160p to 4p in the last six years. Maybe he wishes he'd bailed out three years ago when the chance to run ITV was offered to him.
HMV’s main battle has been with the big supermarkets and online giant Amazon. The firm is hoping to capitalise on the woes of its rival Game Group, which fell into administration in March, but the new chief executive (Trevor Moore, the former CEO of camera chain Jessops) will have a tough job of further managing a very unhappy decline.