Monday, 19 December 2011

HMV faces the double whammy of falling sales and digital migration

The battle for to cling onto sales on the high street continues this morning as music retailer HMV has announced this morning that it made an underlying pretax loss of £36.4 million pounds in the 26 weeks to October 29,£9m more than the same period last year.

Whilst telling the city that it has adequate resources to continue trading across the Xmas period and into the foreseeable future,it added that the economic environment and trading circumstances create material uncertainties which may cast significant doubt on the group's ability to continue as a going concern in the future.

Battling against music's move online the Company also faces intense competition from supermarkets and internet retailers.

Back in June,the company was forced into a £220 million refinancing deal with banks and sold its Waterstone's book chain and a Canadian arm to cut debt.

However as consumer confidence falls with sales at stores sales over a year down 11.6 percent,it is be relying on Xmas to boost both sales and turn stocks into much needed cash.

The group has tried to diversify into technology,transforming its stores into selling tablets,docking stations and moving into the top end of the headphones market but with others stores such as Comet finding that market tough,it will be interesting to see just how sales revive in this important part of the year

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