HMV like-for-like sales down

28-09-2006

Music and book retailer HMV has reported a 3.7 per cent fall in like-for-like group sales in the 12 weeks to September 23rd, although it said that more competitive pricing had helped boost its performance despite the "extremely difficult market" in music and DVD sales.

The company said that once sales at its newly acquired book chain, Ottakar's, were taken into account, overall group sales were up by 9.5 per cent on the same period last year.

Sales at HMV UK and Ireland were down 1.2 per cent over the same 12-week period, with like-for-like sales down by 5.4 per cent.

However, HMV stressed that the fall in like-for-like sales at its music business compared to a 16.7 per cent like-for-like fall reported for the first nine weeks of 2006, with more competitive pricing at its stores helping the company to boost its share of the UK's music and DVD market.

Sales at HMV's website are also up 150 per cent on a year ago, although the company said that its gross margins were down by 250 basis points.

HMV said that a high-profile advertising campaign promoting lower prices across its HMV UK stores, which were instigated earlier this month, would "continue through the autumn to provide HMV UK with a strong competitive platform going into the crucial Christmas trading period".

HMV UK also launched hmvdigital.com today, which it described as "an enhancement to its existing digital downloading service" that will allow consumers to download music without having to install any additional software.

Meanwhile, HMV said that like-for-like sales at its book store chain Waterstone's were down by three per cent in the 12 weeks to September 23rd, compared to a 6.1 per cent decline in the first nine weeks of the year.

The retailer added that it was making "excellent progress" in integrating its new book chain Ottakar's, which it acquired earlier this year. To date, 70 Ottakar's outlets have been converted to carry the Waterstone's brand, with the process of re-branding in stores set to be completed by early November.

At HMV's annual general meeting later today, group chairman Carl Symon is expected to tell shareholders: "The markets in which the group operates, particularly music, continue to experience very difficult trading conditions."

"However, I am pleased to report that we are exactly on track with the implementation of the strategic initiatives which we outlined earlier this year."

"These include integrating Ottakar's within Waterstone's, simplified, lower prices in HMV UK and ramping up our online channels, with which we have taken our first major steps to becoming a truly integrated, multi-channel retailer," Mr Symon will add.


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