Record low for HMV shares after sales dive

HMV Group has posted a worse-than-expected first-half loss of more than £40m after sales plummeted at its high street entertainment chain, as the heavy snow of the last two weeks "significantly undermined" its start to the crucial Christmas trading period.

Simon Fox, the chief executive of HMV, which also owns Waterstone's, put on a brave face by saying the next four weeks would "largely determine" its full-year profits, touting a strong line-up of music, films, books and computer games for Christmas.

But the performance spooked the City and HMV's shares sank by 7.25p, or 17 per cent, to 36.5p – the lowest since its flotation in 2002.

Under Mr Fox, HMV has diversified its revenues over the past year into areas, notably live concerts and festivals and clothing, but progress appears to have been too sluggish for investors and City analysts.

Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers, said: "These results do little to ease fears that HMV is slowly being consigned to the history books."

Pre-tax losses at HMV nearly doubled to £41.3m over the 26 weeks to 23 October, compared with a loss of £24.9m last year. The main drivers of this deficit were tanking sales of CDs, DVDs and computer games at HMV in the UK and Ireland, which led to a 16.1 per cent slump in the chain's like-for-like sales over the half-year.

Mr Fox said: "The increased loss reflects the tough trading conditions in HMV UK, where progress in growing new product categories was not sufficient to offset weak entertainment markets."

More specifically, HMV UK said the "the most challenging market" was computer games, with sales down by 12 per cent, following a 30 per cent fall in the sector last year.

The group's performance at Waterstone's was much better, but the book chain's underlying sales still fell by 3.2 per cent, which contributed to a £9.9m operating loss at the unit.

Waterstone's is trying to tailor its book offer more to local customers, having overhauled its distribution network into stores last year.

Mr Fox said: "In Waterstone's, the recovery plan is on track." Citing a "strong line-up of offers" for Christmas, HMV has high hopes for sales of Take That and Cheryl Cole's albums, Kinect for Xbox 360 and Call of Duty: Black Ops games, and books by Jamie Oliver and Stephen Fry.

But Mr Fox said the weather had taken its toll on early festive trading, with customers struggling to get to its shops in badly affected areas, such as Scotland.

He said: "Despite more encouraging trading at the beginning of the second half, the start to the Christmas trading period has been undermined by the severe weather of the last two weeks, which has significantly affected consumer footfall and consequently makes trading patterns hard to determine at this stage."

Total sales at HMV fell by 6 per cent to £749.5m.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
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

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn