HMV Reports Big Losses
HMV’s sales have fallen below £1 billion this year, its lowest sales yet. The struggling music, films and games retailer is finding it difficult to compete with online retailers and pre-tax losses have hit £38.6m from break-even in 2011.
Social online books retailer aNobii, in which HMV was a partner along with various major book publishers, was sold to Sainsbury's earlier in the year and HMV are now attempting to sell ‘HMV Live’ which runs 13 venues and a number of festivals including Lovebox in London and Global Gathering near Stratford-upon-Avon. The group sold the Hammersmith Apollo in May to Stage C for £32m in a move that HMV said was a "critical requirement".
Former chief executive Simon Fox issued this statement before he stepped down with a £500,000 pay-off, “The last year has been a difficult and challenging one for HMV and, as expected, this is reflected in our annual results. However, we are confident that the actions we have taken will enable us to significantly improve cash generation and make profits of at least £10m in the year ahead."
With digital sales continuing to eat away at high street revenues, in January HMV's lenders agreed to give the retailer nine months' breathing space, while most music publishers and film companies, including Universal and Disney, agreed to cut their prices. In return they received a 2.5% stake in HMV.
HMV said that its key recorded music business is "expected to decline in value by approximately 20%" over the next 12 months, as more people opt to get their albums and singles over the internet. As part of efforts to move into digital, HMV now owns a 50% stake in ‘7Digital’, the company which provides music download content on a range of devices, such as Samsung and Research In Motion tablets.