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."

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Latest comments (7)

Richard Adams Games Designer 10 years ago
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.
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Paul Smith Dev 10 years ago
HMV needs to completely overhaul its video game sections, Their DVD and Blu-rays sections are great but the Cd's and games are way overpriced, It was only the other week when I saw the latest Castlevania for 45!

Edited 1 times. Last edit by Paul Smith on 30th June 2011 10:05am

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Terence Gage Freelance writer 10 years ago
I couldn't tell you the last time I shopped in HMV - it must have been a good couple of years or more. They occasionally do good games prices in their sales (relative to high street stores), and similarly do good offers on new-ish DVDs, but their range of games always seems very limited and as pointed out above, they have some ridiculous prices on some titles.

They sometimes offer decent prices on trade-ins, but I can't help but feel they'd be better scaling back their high street presence, put more onus on the website (which more often has competitive pricing) and in the games sector try to differentiate themselves from Game, Blockbuster et al a little.
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Tommy Thompson Studying Artificial Intelligence (PhD), University of Strathclyde10 years ago
They have made 'some' efforts to improve in recent months, but it's always a somewhat half hearted gesture. For the first time in years I purchased a handful of 360 games for 10 each (Crackdown 2, Vanquish & BlazBlue) from their store. However while they had a stack of dated or less successful titles going cheap, most titles still sat within the 25-45 region.

It's the same as always, the selection is poor, the prices of non-sale items are always 5-10 more than you're comfortable spending with and as Richard noted, are often dearer than high street competitors. A waste of time.
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Mark Gilbert Games Designer, Abstraction Games10 years ago
They also used to offer a games reward card (they didn't hand out many but honoured it for a while) which gave 2x the amount of points as Game's. When I was game shopping often my local HMV had the same price as Game but due to the 2x points it was worth going there. After scrapping that there wasn't much point going in any more for me.
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Jake Clayton10 years ago
Sadly Hmv is still trying to sell games at the 40-45 quid 6 months into their release.

When you can pre-order for 30-35 whats the point?
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James Verity10 years ago
Like most retailers they dont even compete with themselves, let alone the competition... heres an idea charge the same price online and offline... then you might get some customers back to the high streets...
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