Suffolk/Essex: Losses widen at troubled retailer HMV
TROUBLED entertainment retailer HMV today revealed that it could sell-off its live music division in a further bid to shore-up its finances as it posted a near-doubling of first-half losses.
HMV, which has around 15 stores in the East of England, in towns including Ipswich, Bury St Edmunds, Colchester and Chelmsford, has already off-loaded its Waterstone’s bookshops chain this year to help secure a new deal with its bankers.
And today the group said it was placing HMV Live, which runs 13 venues and a number of music festivals, under strategic review which may lead to its sale.
The decision comes despite the live music division having delivered 8.2% growth in sales during the first of the the group’s financial year, to �31.2million, helped by a good summer festival season with attendances up more than 20%.
However, HMV posted a bottom-line pre-tax loss of �45.7m for the 26 weeks to October 29, against a �27.4m loss for last year’s first half.
The group, which has a total of 252 stores in the UK said its shift in focus to technology products, which has seen 144 stores refitted to reflect the new emphasis, was paying off with like-for-like sales of headphones, speakerdocks and tablet computers up 144%, although the timing of the refits meant this had yet to show up in reported sales.
But with continued pressure on sales within its traditional lines, such as CDs and DVDs, amid competition from supermarkets and online retailers, HMV said that like-for-like for the opening seven weeks of the second half, to December 17, were down 13.2%.
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And it warned that the economic and trading environment created “material uncertainties” which may cast doubt over its future, with directors continuing to engage in talks with its lenders.
Earlier this year, HMV announced the closure of up to 60 stores in a bid to achieve �10million of cost savings, with 15 being closed during the first half.
The sale of Waterstone’s, together with its HMV Canada business, raised the group �55m and ensured a �220m refinancing deal with its lending banks.