HMV considers sale of live music division as losses grow
19 December 2011 10:59
Embattled entertainment retailer HMV has today announced that it is considering the sale of its live music division in order to shore up its finances in the face of growing losses.
The company said that it was to initiate a strategic review of HMV Live, which runs 13 venues and a number of festivals including Lovebox in London and Global Gathering near Stratford-upon-Avon - a review which could ultimately result in a sale "the proceeds of which would strengthen the financial position of the group".
The news came as HMV reported its half-year trading figures today, which revealed that in the 26 weeks to October 29th its total group losses had risen to £50.1 million, up from £30.9 million during the same period last year. Total sales from continuing businesses were down 17.6% to £364.9 million, with like-for-like retail sales down 11.9%. HMV Live itself turned a £3.4 million profits, up from £1.5 million in 2010.
The results statement did allude to a successful restructuring with progress continuing on a wide range of initiatives including improving the retail offer with refitted stores, and better product pricing driving market share gains. In particular HMV has increased its emphasis on technology and has refitted 144 of its stores to reflect this shift in product offer. Tapping into the UK public's insatiable appetite for such products has started to pay off, with like-for-like sales of tablet computers, speaker docks and headphones increasing 144%.
Nevertheless these remain difficult times for HMV which is continuing to be battered by the prevailing economic winds which, according to the company statement "create material uncertainties which may cast significant doubt on the group's ability to continue as a going concern in the future."
Commenting, chief executive Simon Fox said: "This has been a challenging start to the year. However, we have taken decisive action to restructure the business and are now seeing the benefits of this, particularly in our Technology products business. Like all consumer-facing companies we are facing tough trading conditions but we continue to push forwards through this period. We remain well prepared for the key trading days ahead."
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