Retail Deathwatch: HMV announce huge losses
It’s snow joke but share prices in the HMV Group have melted by 20% after the announcement of some depressing figures earlier today. The veteran entertainment retailer made a pre-tax loss of £41.3m in the six months to 23rd October – and the recent weather means things haven’t improved leading up to Christmas.
By comparison, the group made a 24.9% loss last year, which makes today’s announcement even more alarming. Like-for-like sales (not including new store openings) fell by 16.1% whereas for Waterstones, which is also owned by the HMV Group, made a far more sedate loss of 3.2%.
HMV have said that the recent vile weather has “significantly affected customer footfall, and consequently makes trading patterns hard to determine at this stage” but when the figures quoted only go up until the end of October, it hardly makes mentioning the snow worthwhile.
Keith Bowman, equity analyst at Hargreaves Lansdown, told the BBC that HMV was "paying the price for failing to embrace the internet much sooner", adding that "These results do little to ease fears that HMV is slowly being consigned to the history books. Furthermore, moves to diversify the product offering smack of desperation, with competition in clothing and electrical products already hugely intense.”
Is Keith right? How relevant are HMV as we hurtle towards 2011? What is that dog's master actually saying to it? TELL US!