Business | General
HMV banks on strong Christmas to cheer sales
CEO is optimistic about the line-ups of new releases in all the main categories of DVDs, music, games and books
- Evening Standard
- Published: 23:49 September 8, 2008
HMV is relying on a strong Christmas as the consumer crunch has started to hit its High Street entertainment and Waterstone's book stores.
Sales at the HMV outlets, which on a same-store basis rose 11.4 per cent in the last financial year, are just 4.3 per cent ahead in the first 18 weeks of this year.
At Waterstone's the slowdown has become a reversal, with last year's 3.3 per cent growth becoming a 1.7 per cent fall once numbers are adjusted to exclude the phenomenal effect of the final book in the J.K. Rowling series, Harry Potter and the Deathly Hallows. On that basis, group sales are up 2.2 per cent against 7.3 per cent.
"This is undoubtedly a much tougher consumer environment," said chief executive Simon Fox who was brought in to HMV from running Kesa Electricals' Comet business two years ago.
"But this is a solid start and we are trading where we expected to be. We never expected to match last year's phenomenal double-digit growth at HMV but think we can carry on with low single-digit like-for-like sales growth, which would be pretty respectable compared to much of the High Street," he said.
The first 18 weeks of the year account for just 25 per cent of the group's revenues while November and December make up 40 per cent. Fox is pretty optimistic about the line-ups of new releases in all the main categories of DVDs, music, games and books in the run up to Christmas.
He pointed out that the sales decline so far at Waterstone's came entirely from a lack of major non-fiction best sellers. Last year non-fiction books were £1 million-plus sellers (The Blair Years, The God Delusion, Gordon Ramsay and Bill Bryson's Thunderbolt Kid). This year there has been just one (another Gordon Ramsay).
At HMV, the gradual roll-out of the new look saw the biggest new store yet open in Liverpool recently. Sales in the new-format stores, of which there are now a dozen with 10 more set to open by next Spring, are still running ahead of those in the old format.
Before the end of the calendar year, HMV will launch its loyalty card and make a major move into trading secondhand video games. The games market is still the strongest area of growth, stimulated by the Nintendo Wii.
- Evening Standard
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