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HMV Chain Hit by Falling Sales
• UK Managing Director falls upon sword
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By
The Minx
Thursday,
11 January, 2007
Music and book retailer HMV Group reported a first-half loss of 31.8 million pounds on Thursday, although the CEO Simon Fox said group sales had improved over Christmas in the UK and Ireland. "The markets in which we operate continue to be very difficult," said Chief Executive Simon Fox.
The news was followed by the announcement of the departure of Steve Knott, Managing Director for UK and Ireland, at the end of January "by mutual consent". The terms under which Mr Knott, who had a year's contract and an annual salary of £320,000, will depart are still being negotiated.
HMV had a pre-tax loss for the six months to October of £24.5m compared to a £2.8m profit a year earlier. Chief executive Simon Fox began cutting prices on DVDs and CDs in September to help fend off competition from Amazon and Tesco.
Mr Fox, who joined the group in September, is also facing a general drop in the value of the music market. The UK music market, including digital downloads, declined by 14pc during October and November and the DVD market also fell in value.
HMV will unveil the result of a strategic review in March, but on 11th January CEO Fox gave the first glimpse of the company's future shape, telling a conference call, "Certainly part of my presentation will address the size of the store portfolio going forward." "
"There's a great deal more we can do with those stores in terms of both the product mix and reinventing the HMV store," he said, adding that selling new products "is absolutely on my list".
"I will go into what I think is a very exciting new concept HMV store (in March), and it may well include (music) downloading terminals," he added.
Discounting by rival booksellers also hit HMV's Waterstone's Books division, where like-for-like sales fell 2 percent over Christmas.
On the Lam 2007
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