Entertainment retailer HMV is to close 60 stores in the UK following a poor Christmas period that saw sales drop 13 per cent.
Sales of entertainment goods have been weak in the financial year to date, said HMV, which also blamed poor weather conditions over the holiday period. For the five weeks to January 1, like-for-like sales were down 12.9 per cent on last year, and down 13.3 per cent for the 10 weeks to January 1.
"Whilst HMV has had a challenging year to date, it remains a profitable and cash-generative business and a powerful entertainment brand," said CEO Simon Fox.
"The pace of change in the markets in which we operate underlines the urgency with which we must continue to transform this business."
HMV added that it expects to miss profit targets for the full year of between £46-£60 million.
In December last year the retailer said that the games sector in particular had underperformed during 2010.
Data from UKIE and Chart-Track released yesterday highlighted that the market for boxed videogame product has fallen by almost 30 per cent in the past two years.
Christmas sales from High Street rival GAME are due to be announced next week.
UPDATE: HMV has issued a statement to GamesIndustry.biz stating that the planned closures are not a sign that the company intends to pull out of the entertainment business.
"We are actually talking about a relatively small number of stores across HMV and Waterstone's chains - less than 10 per cent of our combined estates, which are likely to be located primarily in large-city conurbations and may be in close proximity to each other - thus resulting in a degree of duplication in relation to local demand," said a representative.
"The vast majority of HMV stores around the country will not be affected, and we will look to ensure that the specialist offer and service that we make available to our customers in these locations is maintained."
"Likewise, we will look to redeploy any affected staff where we possibly can. This move in no way signals any intention to pull out of entertainment retail, which remains at the heart of our offer, and is ultimately aimed at safeguarding our core business as we continue our transformation into a broad-based entertainment brand that now also encompasses live music venues and festivals."