Games put HMV in party mood as it transforms
Sep 6 2008 by Peter McCusker, The Journal
HIGH street retailer HMV has avoided the gloom on the high street as it said demand for games such as Grand Theft Auto and Wii Fit had helped lift sales.
At HMV stores in the UK and Ireland comparable sales grew 4.3% in the 18 weeks to August 30, thanks to an increased focus on games and technology under its turnaround plan.
Games sales raced 50% ahead year-on-year as the sector’s popularity continued.
Group like-for-like sales grew by a more muted 1.3% after a 4.3% fall in comparable sales at its book arm Waterstone’s, which is struggling against tough comparatives from last year’s Harry Potter boost.
The group-wide growth also marked a slowdown from a 10.1% surge seen in the final 16 weeks of its last financial year, which put shares under pressure yesterday, down 2%.
But HMV said the lower sales growth had come at a quieter time of year and revival plans were on track.
It also looked to a robust line-up of expected Christmas top sellers, with music releases from the likes of Oasis, Snow Patrol and the Kaiser Chiefs, as well as games such as Fifa 09.
HMV said it was cracking on with its turnaround strategy and new store formats, having opened the doors to its largest new-style store this week at the Liverpool One shopping centre.
It will also launch an HMV UK loyalty card and a second-hand games offering by the end of the year.
It is planned to introduce MP3 digital downloading later this month.
HMV said excluding the impact of last July’s release of Harry Potter and the Deathly Hallows – the last book in the series – Waterstone’s comparable sales fell by 1.7%, with the group notching up a 2.2% rise.
HMV chief executive Simon Fox said: “In what is undoubtedly a tough consumer environment, the solid start made by the group to the new financial year means that our plans are in line with the board’s expectations and I remain confident that our strategic initiatives are on track.”
Mr Fox announced a three-year overhaul last year to rescue the group as it struggled against plummeting music sales in the face of digital downloading and competition from supermarkets.
Having admitted it had been too slow to recognise the market changes, HMV embarked on a strategy to focus on big-selling games and consoles, push into digital music and online retailing and revamp its stores.
Its next generation HMV stores include digital download hubs, gaming stations and smoothie bars.
In a tough consumer environment, I remain confident our strategic initiatives are on track.
