Shrinking DVD and CD sales push HMV into £38.6m loss

HMV: retailer predicts a further fall in physical music sales in the next year
HMV: retailer predicts a further fall in physical music sales in the next year

Declines in HMV's core markets have pushed like-for-like sales down 12.1%, forcing it into the red for the year as it attempts to become the UK's "leading entertainment brand", under a new management team.

Physical music sales fell 19% over the year and the business expects them to drop another 20% in the next year.

Visual sales fell 13% and games fell 17%, underlining the scope of the challenge facing the retailer in the wake of the disposal of Waterstones and HMV Canada, and its ongoing attempts to dispose of its live entertainment business.

The company reported a pre-tax loss of £38.6m on sales of £873.1m in the 52 weeks to 28 April, according to the statutory results for its continuing operations, which do not include the live entertainment business.

In the UK it closed 23 stores and opened one during the financial year, while on Tuesday (7 August) it completed the sale of the Hammersmith Apollo for £32m in cash to a company jointly owned by Anschutz Entertainment Group and CTS Eventim.

It described the sale as a "critical requirement to establish a stable capital structure".

Seeking bright spots amid the gloom, the company revealed its loyalty scheme has now acquired more than two million card holders since 2009.

It also said there was an opportunity to leverage further the value of the HMV brand and its retail presence through partnerships with technology device suppliers and other industry participants.

Under the new mangement team of chief executive Trevor Moore and group finance director Ian Kenyon, HMV said it expects to return to profitability over the next year.

Former Jessops chief executive Moore is to join in September, having been appointed last week when incumbent chief executive Simon Fox resigned.

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