Parent company HMV hit by weak Waterstone's

Dec 12 2009 by Iain Laing, The Journal

Across the wider business, HMV boosted technology and entertainment products to 9% of its sales mix, and continued to make share gains in a weak video games market.

The company said its conversion of 32 stores from failed rival Zavvi to HMV outlets had given a further impetus to sales, while its purehmv loyalty card is on track to attract one million customers in its first year.

It also hopes to bolster its digital offering through a 50% stake in online music services company 7digital, which has a catalogue of more than six million digital music tracks. Chief executive Simon Fox said HMV was still committed to the Waterstone’s business despite speculation over a possible exit from some analysts.

But he said sales trends had shown further weakness in the celebrity book market, which has seen new titles from the likes of Jeremy Clarkson and Peter Kay this year.

“Celebrity non-fiction titles are down quite sharply on last year,” Mr Fox said.

Celebrity non-fiction represents around a third of the entire book market but, while last year four titles sold more than 100,000, none had hit that level so far, Mr Fox added.

Singer analyst Matthew McEachran said: “Out-performance in HMV UK and group-wide cost savings mean that forecasts remain unchanged despite the disappointment from Waterstone’s and the weak games market conditions.”