HMV Announces Further Losses

Media retailer HMV has today announced significant losses in its core operations as it approaches it’s most profitable time of year, suggesting that it may have been hit by the credit crunch and the knock on effect on consumer disposable incomes.

The company today reported that it had made a loss over the half to the end of October of some £28.7 million, albeit slightly down from a loss of £29.2 million in the year previous showing a slight improvement in sales despite the overall continuing negative trend.

The announcement today comes as HMV stores across the country are gearing up for their busiest period of the year in the days before Christmas, where the company traditionally enjoys particularly strong sales in the gift market. However the company has been hit in recent years as a result of strong price competition from supermarket chains, many of which sell CDs and DVDs at comparatively low prices.

Additionally the growth of sales from online media retailers over the last five years has continue to eat away at the high street chain’s market share, increasing prevelance in the market and steadily growing underlying sales figures year on year. As a result, the company has said that its losses may be put down to a combination of this competition effect and the wider economic climate.

The group which also owns Waterstones said that its sales throughout the UK and Ireland had been up on the period previous, and that it was expecting strong sales performance in the immediate run up to Christmas and in the post festive sale period, with increasing strength from its own online division HMV.com and its technology product lines.

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