Posted January 5, 2011 Shares in music and books retailer HMV Group have fallen 24% after revealing falling sales, weak profits and trouble meeting the terms of a bank loan. The firm - which also owns Waterstone's bookshops - plans to close 60 stores in the next 12 months in order to get costs under control. It said Christmas sales were down 10%, and warned profits would be at the lower end of forecasts. Business was hit by the severe weather and "challenging trading conditions". Like-for-like sales for the crucial five weeks to 1 January were down 10.2% on last year, due to a 13.6% slump at its HMV music stores in the UK and Irish Republic. Entertainment market HMV's share price has declined steadily throughout 2010, and the latest drop brings its cumulative fall to 78% over the last 13 months. Continue reading the main story The firm also said in its trading statement - which was issued a week earlier than planned - that it was struggling to avoid breaching the terms of a bank loan. "The board now expects that compliance with the April covenant test under the group's bank facility will be tight and is taking further mitigating actions during the next four months to address this," the company said. As well as the store closures, HMV said it would implement other cost-cutting measures that would save it a further £10m per year. It said profits for the year to April would be at the bottom end of the £46m-60m range expected by markets. Although the company partly blamed the snow for the poor result, it conceded that underlying demand for its CDs, DVDs and games was weaker than hoped, and also pointed to "well-reported consumer headwinds as we enter 2011". "The pace of change in the markets in which we operate underlines the urgency with which we must continue to transform this business," said the firm's chief executive Simon Fox. Meanwhile, sales at its Waterstone's bookstores appeared to have stabilised, and were unchanged during the Christmas period compared with a year ago. The company attributed this "pleasing" result to turnaround actions implemented last year. Separately, fellow retailer Games Workshop also saw its share price dive as it faces tough trading conditions in the entertainment market. Sales of its fantasy figurines and other products fell 4% in the six months to 28 November compared with a year earlier. The company further warned that "difficult trading conditions since that time mean that this shortfall is unlikely to be recovered by the year end". As a result, the firm feared that profits for the year to May were unlikely to meet market expectations. Shares in Games Workshop fell nearly 18% in early London trading. http://www.bbc.co.uk/news/business-12117510 They'd better not close my local one. Im not the biggest fan of HMV but theyre the last place to buy dvds now in town unless you go to the supermarkets. Share this post Link to post Share on other sites
Posted January 5, 2011 Good, HMV is shit and it needs a kick in the arse to sort itself out. How they can charge £14.99 on their website for a dvd then £30 in store I do not know. Share this post Link to post Share on other sites
Posted January 5, 2011 http://www.bbc.co.uk/news/business-12117510 They'd better not close my local one. Im not the biggest fan of HMV but theyre the last place to buy dvds now in town unless you go to the supermarkets. Isn't it probably cheaper going the supermarket though? On the general topic, i agree with Ramar the instore prices are stupid, xmas 2009 i found loads of bargains to buy but this year it was all pretty much shit for prices. No wonder there xmas sales are down! They are nice to walk round and pretty much see everything but thats about it at the mo. Share this post Link to post Share on other sites
Posted January 5, 2011 Yeah it probably is cheaper but they arent as easy to get to from the town centre (I dont drive) and they just dont have the same amount of choice. So while I do agree with you guys about HMVs terrible pricing, I pretty much just have nowhere else to go in town for dvds. Share this post Link to post Share on other sites
Posted January 5, 2011 Strike me as a company who've relied on the name/branding to charge people high prices, possibly same for the Waterstone's label too, but you can't really do that these days, high street stores need to compete with both the oft cheaper online market, the ever increasing second hand market(something I believe HMV don't touch? Or maybe I'm wrong), and also the existent help of the internet in helping find high street bargains and cheapest sellers. These days I believe a lot of people who are going out to the shop for something, tend to know exactly where they're going to get it from and how much they'll pay before they've stepped out the door. Share this post Link to post Share on other sites
Posted January 5, 2011 I rarely buy from HMV, but I tend to browse it if I'm shopping near one. Last thing I bought was around July when I spotted Smash Bros. Brawl (new) for £10. Share this post Link to post Share on other sites
Posted January 5, 2011 Strike me as a company who've relied on the name/branding to charge people high prices, possibly same for the Waterstone's label too, but you can't really do that these days, high street stores need to compete with both the oft cheaper online market, the ever increasing second hand market(something I believe HMV don't touch? Or maybe I'm wrong), and also the existent help of the internet in helping find high street bargains and cheapest sellers. These days I believe a lot of people who are going out to the shop for something, tend to know exactly where they're going to get it from and how much they'll pay before they've stepped out the door. I know they do second hand games now Share this post Link to post Share on other sites
Posted January 5, 2011 I know they do second hand games now Everyone seems to do second hand games these days. I believe that Tesco, ASDA and Amazon.co.uk have started doing it. It wouldn't surprise me if McDonald's started doing second hand games. Share this post Link to post Share on other sites
Posted January 5, 2011 Strike me as a company who've relied on the name/branding to charge people high prices. Agreed! (something I believe HMV don't touch? Or maybe I'm wrong) They do dabble in the second hand market for games but not dvds. Share this post Link to post Share on other sites
Posted January 5, 2011 Strike me as a company who've relied on the name/branding to charge people high prices, possibly same for the Waterstone's label too, but you can't really do that these days, high street stores need to compete with both the oft cheaper online market, the ever increasing second hand market(something I believe HMV don't touch? Or maybe I'm wrong), and also the existent help of the internet in helping find high street bargains and cheapest sellers. These days I believe a lot of people who are going out to the shop for something, tend to know exactly where they're going to get it from and how much they'll pay before they've stepped out the door. They have delved into second hand games, I'm not too sure how good that service is from them. And I completely agree with what you said about consumers knowing they can get a bargain else where. I went shopping yesterday and before I went out I jotted down prices of things I was going to see if I could find. In the end I bought a dvd from HMV it was £5 more than online, but I had a £10 discount voucher that made it worthwhile. Had I not had that, they'd have lost a sale. To be fair it's not just HMV, GAME charge £34.99 for 12 months Xbox Live on their website, to buy it instore you have to pay £39.99. A five pound markup just for going to the shop. Share this post Link to post Share on other sites
Posted January 5, 2011 I rarely buy from HMV, but I tend to browse it if I'm shopping near one. Last thing I bought was around July when I spotted Smash Bros. Brawl (new) for £10. I found that as well! Think it was the HMV at trafford centre i snapped that up! Everyone seems to do second hand games these days. I believe that Tesco, ASDA and Amazon.co.uk have started doing it. It wouldn't surprise me if McDonald's started doing second hand games. Yep, i always find it weird when i see the pre-owned section in my local asda! Share this post Link to post Share on other sites
Posted January 5, 2011 I have been thinking about trying out Amazons trade in system soon. Id much rather get money put into my amazon account for trading in stuff. Share this post Link to post Share on other sites
Posted January 5, 2011 I think both the HMV and Waterstones brand have seen this coming for a long while. Although I understand more staffing and maintenance costs are required for a brick and mortar store hence the higher prices compared to those bought online, I think they take the piss a bit too much and pay no research to their competition. This is incredibly evident when it comes to gaming, as they are persistently the most expensive. Waterstones however, although I'm disappointed for them as I do like the feel of going in and finding a non-used book that feels good, have a quick read and make up my mind. But this feeling has slowly died and I've moved to more of the casual bookshops that are essentially second hand. Why? Well Waterstones keeps making the fucking odd decision to relinquish most of it's shelf space for novelties, such as Nintendo game consoles (Wat?) and if I recall, there are like two different sets of coffee establishments in the Liverpool One Waterstones. They've been complacent for a while because they've had next to no competition, but now they're going to have to jump through hoops I'm afraid. Share this post Link to post Share on other sites
Posted January 5, 2011 I love going into the Oxford Circus HMVs just because I like to oggle at all the shit they have that I want. And also because they have SF4 set up with two arcade sticks to facilitate my thrashing of fools. I don't often end up buying anything from those stores though. Share this post Link to post Share on other sites
Posted January 5, 2011 Don't blame the people for shopping elsewhere as it's ridiculously expensive. Plus, beforehand, in the run up to Christmas, the queues were terrible and there were only like two staff on tills. The bad thing is, the queues blocked various parts of the store. Share this post Link to post Share on other sites
Posted January 5, 2011 Gutted HMV. LOL @ Games Workshop. If you open a shop in Aylesbury it is business suicide basically. Share this post Link to post Share on other sites
Posted January 5, 2011 HMV is literally the only shop in Sheffield city centre that sells CDs now. I'll be fucking pissed if that closes- just because it'll make it impossible for me to go out and buy music. There's Meadowhall, but Meadowhall is an Pit of Obsidian Hate and must be avoided/ Purged by Fire if at all possible. Share this post Link to post Share on other sites
Posted January 5, 2011 Don't blame the people for shopping elsewhere as it's ridiculously expensive. Plus, beforehand, in the run up to Christmas, the queues were terrible and there were only like two staff on tills. The bad thing is, the queues blocked various parts of the store. God you're such a curmudgeon at times HMV opened in my home town recently. I felt like it was a big joke by HMV on my home town, like "ha you're so shit so we're going to be ironic and open up here". Anyway, no doubt that'll close. Share this post Link to post Share on other sites
Posted January 5, 2011 HMV is literally the only shop in Sheffield city centre that sells CDs now. Wasn't there one on Division St? Share this post Link to post Share on other sites
Posted January 5, 2011 God you're such a curmudgeon at times HMV opened in my home town recently. I felt like it was a big joke by HMV on my home town, like "ha you're so shit so we're going to be ironic and open up here". Anyway, no doubt that'll close. What do you mean by "at times"? :p Share this post Link to post Share on other sites
Posted January 5, 2011 Wasn't there one on Division St? That'd be Fopp, which was my favourite shop of all time until it closed. Share this post Link to post Share on other sites
Posted January 5, 2011 I hope the one closest to me doesn't shut down. There's no music store in the town I live in (we had a Fopp but that went when they caved in) and the only thing nearest where I can get the kind of music I listen to (which is generally niche stuff) is HMV in the next town over, about 15 minutes away. If that goes, well there's ASDA or Morrisons which is great if you're wanting the typical pop crap clogging up the charts these days but anything else and I'll have to start forking out to venture up to Edinburgh or something. HMV are ridiculously expensive at times. I often wonder how they can go from selling a CD at £9.99 and then marking it up to £16 a couple of weeks later or having an EP which should be £5 and selling it for more than twice that. It's made me not buy CDs I want as HMV is the only place I can get them from. I suppose I could order online but I'm one of those people who likes going into music stores and picking up the CDs. But god do I miss the days of the independent record stores. If only they were still around. The only one I know only deals in second hand stuff but it has a great atmosphere. Share this post Link to post Share on other sites
Posted January 5, 2011 Well if they will overprice their stock and generally rip people off then... The only time I've ever bought from HMV is when they have a sale on and even then it only really brought the prices down to more like what they already are elsewhere, I get that they have a large selection of music but when you can buy it elsewhere for - in some cases - a lot cheaper then it's kind of a no-brainer isn't it? Share this post Link to post Share on other sites
Posted January 5, 2011 I just hope it gives them the kick up their ass to sort it out. I don't want them to close, I just want their disorganised nature and messy style to be addressed! I can empathize with the staff the trouble it must be to try and sort stuff out, but I have been put off of going in there just because I know it will be a nightmare attempting to locate what I'm looking for and that the prices will be too high. I also agree with GAME's prices. I hope they buck up their ideas soon! Share this post Link to post Share on other sites
Posted January 5, 2011 If the HMV in Newport closed, it will finally kill the high-street shopping. Put the final nail in the coffin, and heading to the cemetary to join the late Woolworths. Seriously, Newport is a waste of time going to. There is only 1 DVD/CD place and that is HMV (WH Smiths does DVDs and CD's, but is crap). HMV is crap. You can't find anything you want because it is never where it says it will be, it is way over-priced (£12 for a copy of Airplane!, when i got it online for £2.20) for what you get for your money and the stores (well, the ones i've been to) are run by emos and goths. Hopefully this will kick them up the rear end and make them more competive. HMV has killed off many other shops. Anyone remember MVC, that was the bees knees for entertainment shopping. There was a music store ages ago in town, sold quality CD's at great prices. Now it is gone. No wonder i online shop. Not only is it cheaper, it is more conveniant as well. Who would of thought i'd say that. Amazon, Play etc all the way. Share this post Link to post Share on other sites
