Despite managing to meet its sales target of making £10 million in pre-tax profits this year, HMV’s sales have continued to drop leading to a further reduction in share price by 8 per cent.
While the company was keen to blame what it described as a lack of new music and video game releases over the summer, it doesn’t mask the fact that like-for-like sales dropped by almost 12 per cent over the past five months.
However, there was some growth for the firm adding a paper thing silver lining to the announcement: hardware and technology sales, or ifems like tablets, headphones and storage devices grew significantly. This was an avenue the retailer was pushing into with the inclusion of items like Dr Dre’s Beat headphones and perhaps offers a window of opportunity for the future.
Chief exeucitve at HMV, Trevor Moore said that he hoped the end of year sales around Christmas and the New Year would help revitalise the firm’s downward spiral: “The like-for-like decline was less marked towards the end of the period and we should be helped in the remainder of the year by a strong pipeline of new releases in the music, DVD and games markets ahead of Christmas,” he said (via The Guardian).
The company recently announced a scheme of purchasing online and picking up in store, in line with similar programs used by stores like Tesco. The hope was not only would it lead to increased sales – driving in-store customers online – but that when people picked up their new product, they might impulse buy something else too.
KitGuru Says: HMV falls into a similar category as GAME, as a retail outlet that was once the pinacle of high street entertainment purchasing. With the growth of online sales and digital distribution platforms like Steam and Origin, can HMV really compete in the contemporary market?