No let-up in HMV's woes as profits slump

AILING retailer HMV yesterday revealed details of a painful year in which bottom-line profits slumped to £2.6 million.

The group, which recently sold its Waterstone's book chain and Canadian business to buy some breathing space in its battle for survival, said the surplus for the year to 30 April compared with 67.3 million the previous year. Underlying profits slumped 61 per cent to 28.9m.

Group sales declined 7 per cent to 1.9 billion, while like-for-like sales at its 266 HMV and Fopp stores in the UK and Ireland were down 14.8 per cent after being squeezed by weaker consumer spending and competition from internet downloads and supermarkets.

There has been no let-up in pressure in recent weeks, as it said that it continues to operate in a challenging environment and the core markets in which it trades remain difficult.

However, the group said it is now on a more even keel following the sale of the two businesses, which raised a total of 55m.

It has launched a strategy to rescue the business by broadening its range to sell more electronic gadgets such as iPods, MP3 players and tablet computers alongside its core music, DVDs and video games. Following an encouraging trial of the range in six stores, it plans to roll out the format to 150 stores by its key Christmas trading period.

HMV also plans to build up its live entertainment and ticket business, which operates 12 venues in the UK, including the Edinburgh Picture House.