HMV profits and sales fall

| June 30, 2011 | 0 Comments

Music, books and games retailer HMV has today reported a pre-tax profit of £28.9 million in the 12 months to the end of April – a fall of 61% compared with the £74.2 million in the same period a year earlier.

Furthermore, like-for-like sales have dived 11% over the past year as it struggles with tough competition from supermarkets and internet companies, such as Amazon.

In a bid to compete effectively in the marketplace, HMV has introduced a new strategy to sell electronic items such as iPods, MP3 players and tablet computers.

Furthermore, as part of a major review of the company, around 150 stores are to be refitted later this year – in time for the crucial Christmas sales period.

“We continue to operate in a challenging macro environment, and the core retail markets in which HMV trades also remain difficult,” said the company.

“However, we have taken decisive action to restructure the group, and have a clear strategy for transforming HMV into a broad-based entertainment business.”

The group recently sold its Waterstone’s bookshops to Russian billionaire Alexander Mamut for £53 million, as part of the restructure.

It has been a week of doom and gloom in the retail sector after it emerged department store chain TJ Hughes was on the brink of administration.

The company said it will be appointing an administrator over the next week or so, unless a buyer can be found for the business.

Meanwhile, Carpetright announced a 70% fall in annual profits and said it is reviewing its stores, which could lead to closures.

Chocolate retailer Thorntons announced plans to close 120 stores over the next three years and said, as part of a strategic review of the business, a further 60 shops could close as it blamed challenging trading conditions for the latest measures.

Last week, fashion retailer Jane Norman entered administration, while furniture chain Habitat said all but three of its stores would be put into administration.

Other struggling retailers include Game, Dixons and JJB Sports, all of which are planning to reduce the number of stores, while Mothercare is cutting 110 shops to focus on out-of-town retail.

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