HMV suffered profit cuts of 20 per cent following a "highly demanding" year on the high street, the audio and video retailer has revealed.
In a disappointing set of annual results reflecting Britain's struggling retail sector, HMV announced that pre-tax negative profit growth of 20.7 per cent translated directly into a 20.9 per cent cut in the group's share value over the past 52 weeks.
"As we expected, trading conditions in the first few weeks of the new financial year have remained difficult," commented HMV's chief executive officer, Alan Giles.
"However, we are making excellent progress with a two-year programme of initiatives which we anticipate will begin to improve performance during the crucial Christmas trading period and, ultimately, transform the group into a world class multi-channel retailer."
Transitory initiatives within the group include its £11.8 million acquisition of rival chain Ottakar's, which helped HMV muster a net debt of £15.6 million.
The group also hopes to combat tough market conditions by reducing prices, improve its online sales and reduce costs, building on the £40 million saved in the last two years.
Although the World Cup has provided a boost to some areas of the retail sector, HMV's market niche appears to have been largely unaffected.
Yesterday's shop price index from the British Retail Consortium showed that efforts to encourage sales through price cuts are running out of steam as the rate of price reductions slows: overall adjusted shop prices rose by just 0.001 per cent, substantially less than the 0.42 per cent recorded in May.
With the latest Nationwide consumer confidence index showing gloomy predictions for summer retail sales following higher utilities and council tax bills, HMV's efforts to improve its position may only have a limited impact on its progress in the coming year.