HMV axes Ottakar brand and 100 jobs as sales continue to slide

HMV, the floundering music retailer that also owns Waterstone's, is axing the Ottakar's brand and making up to 100 Ottakar's staff redundant following its recent £63m acquisition of the rival book chain.

The Ottakar's brand will disappear from UK high streets by Christmas as part of HMV's attempts to integrate the chain and revive its fortunes after a dire year that saw annual pre-tax profits crash by 37 per cent to £80.2m. Its shares fell 5.25p to 168p.

The group also said it had misjudged its music download strategy less than a year after its belated entrance into the market. It is taking a £4.5m charge to its profit and loss account after failing fully to appreciate the stranglehold Apple has on the young download market, choosing instead a partnership with Microsoft.

When it was launched last September HMV's digital download site was widely criticised for its incompatibility with Apple's iPod MP3 players, which dominate the market. Alan Giles, who is quitting as chief executive, said yesterday: "Digital downloads are growing less rapidly than we first thought, particularly the sector that is not dominated by Apple."

The company, which rejected a 210p-per-share bid approach from Permira earlier this year, is believed to have narrowed its shortlist for Mr Giles's replacement to three candidates but would not be drawn on how much longer the search process would take. Mr Giles has said he will stay until December but analysts are anxious the company will remain in a strategic vacuum with a lameduck chief executive.

HMV is under pressure to fend off competition from internet-based rivals and supermarket chains, which are undercutting its prices and stealing market share. Sales figures released yesterday showed that trading had worsened in the past nine weeks. At its HMV stores in the UK and Ireland like-for-like sales fell 16.7 per cent during the period, while at Waterstone's they were 6.1 per cent weaker. Total group underlying sales fell 10.1 per cent.

The company pinned much of the blame on a weak retail market held back by the World Cup and a lack of big-name CD and DVD releases. It is still losing ground in the music market. It is investing £25m on cutting prices of CDs and DVDs as part of a new, simpler pricing architecture. The move will knock its margins by 250 basis points but is intended to drive sales by 8 per cent following a successful trial in a handful of its Welsh stores.

Mr Giles said it was "too complex and costly" to keep the Waterstone's and Ottakar's brands. HMV is closing Ottakar's offices at Salisbury, London Bridge and Clapham with the loss of up to 100 jobs. James Heneage, Ottakar's co-founder and managing director, will leave in six months.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Angel Di Maria is shown the red card
tech
Sport
Roger Federer after his win over Tomas Berdych
sport
Life and Style
News in briefs: big pants in 'Bridget Jones's Diary'
fashionBig knickers are back
Sport
James Milner is set to sign for Liverpool this week despite rival interest from Arsenal
sportReds baulk at Benteke £32.5m release clause
News
The controversial Motor Neurone Disease Association poster, featuring sufferer Michael Smith, has drawn a series of angry complaints
newsThis one has been criticised for its 'threatening tone'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral