HMV see sales and profits plummet
Total group losses hit £121.7 million as game sales "significantly underperform"
Retailer HMV has released details of its full year financial results, in which total group sales fell by 7.4 per cent and total sales from continuing operations by 10.1 per cent.
Pro forma profits before tax were reduced from £74.2 million in 2010 to just £28.9 million ($46.5m/€32.0m). With book seller Waterstone's and HMV now counted as discontinued operations, total group loss after tax and exceptional items was £121.7m ($195.8m/€135.1m) - compared to a profit of £49.2 million the previous year.
The poor results were not unexpected and the group has recently undergone significant restructuring, with a drive to reduce costs and to increase its range of portable digital products.
The market for video game sales were described as having "significantly underperformed the industry’s expectations", with HMV's performance being weaker still due to price competition from supermarkets and online retailers.
In the UK and Ireland specifically the games market saw a 14 per cent contraction in value, but although HMV's market share generally decreased its pre-owned games business saw sales increase by 46 per cent.
HMV International total sales increased by 6.9 per cent to £33.2m, including an increase for like-for-like sales of 4.3 per cent. This area of the business saw a growth in game sales, as well as the successful introduction of other technology and related products.
"Our group has been simplified and our strategic agenda is tightly focused. We must rebuild and do so quickly. At the heart of our business is a world-class entertainment brand, surrounded by high quality assets, dedicated people and the support of our business partners," said chairman Philip Rowley. "With this strong underpinning, our urgent priority on behalf of all our stakeholders is to re-create value."
HMV isn't just more expensive than the online and supermarket retailers but usually also the high street games stores. Despite many HMV stores boasting the same amount of stock (at least within the shop) as say Game, I don't think that I've ever found a game that I was after cheaper there than elsewhere. Same for CDs and DVDs to be honest.
It would be different if they also stocked goods that you couldn't pick up elsewhere but its always the same products as their high street competitors for the same price, if not dearer.
Posted:A year ago