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'Material uncertainties' for HMV after sales drop

HMV has warned it faces “material uncertainties” going forward and is likely to breach a bank covenant in January.

In its latest trading update, the entertainment retailer—which sells books as well as DVDs, music and device-ware—reported sales for the first half of its financial year were down 13.5% to £288.6m with like-for-like sales down 10.2%.

In the 26 weeks to 27th October 2012 the group reduced its total loss after tax and exceptional items to £36.1m, down from £50.1m at the same point last year. Its net cash outflow from operating activities has increased to £33.5m up from £28.4m in 2011.

Notably, the retailer wrote in its business update that “current market trading conditions result in material uncertainties facing the business”. It added that there would be a “probable covenant breach at the end of January 2013”. It blamed a “disappointing” release schedule over summer which impacted on sales, although it also added that like-for-likes saw an uplift after summer.

HMV’s new chief executive Trevor Moore, appointed in September to replace Simon Fox, said: “HMV has had a difficult first half. However, the business has started to deliver a number of new initiatives, which will help to maximise the seasonal sales opportunity and provide a platform for growth in 2013. Additionally, as we trade through this period we will continue to develop further initiatives with our suppliers and I will provide updates at the appropriate time.”

Within the period HMV sold its stake in e-book business Anobii to Sainsbury’s for £1.

In August, The Bookseller reported that book sales at HMV, which formerly owned Waterstones, had increased by 16% year-on-year, not including sales of Fifty Shades series, as a result of refocusing its core offer back on “sex, drugs and rock ‘n’ roll”. It also introduced a two for £10 chart offer. Including Fifty Shades, the retailer had increased year-on-year book sales by 28% in August, it said.

 

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All that trading and still coming in with a £36 million pound loss, albeit down from £50 million. How much of a loss does HMV need to convince its share holders that trading in music and books is a dead parrot and is no more, has ceased to be, bereft of life, rests in peace, is deceased and popped its clogs. What on earth does HMV think is going to happen? Is it waiting for the patron saint of books to descend and somehow save it?

Virgin Megastore, the Mecca on the corner of Oxford Street and Tottenham Court Road is now a massive Primark, glitzy, expensively fitted out and full of stock and customers. That's reality, even in recession girl's shop till they drop but music and books they can buy online.

The only thing HMV can realistically do is run the business down, dumping its leases in a controlled retreat. The other alternative is to start selling dresses.

http://www.darcyblaze.com/

All that trading and still coming in with a £36 million pound loss, albeit down from £50 million. How much of a loss does HMV need to convince its share holders that trading in music and books is a dead parrot and is no more, has ceased to be, bereft of life, rests in peace, is deceased and popped its clogs. What on earth does HMV think is going to happen? Is it waiting for the patron saint of books to descend and somehow save it?

Virgin Megastore, the Mecca on the corner of Oxford Street and Tottenham Court Road is now a massive Primark, glitzy, expensively fitted out and full of stock and customers. That's reality, even in recession girl's shop till they drop but music and books they can buy online.

The only thing HMV can realistically do is run the business down, dumping its leases in a controlled retreat. The other alternative is to start selling dresses.

http://www.darcyblaze.com/

All that trading and still coming in with a £36 million pound loss, albeit down from £50 million. How much of a loss does HMV need to convince its share holders that trading in music and books is a dead parrot and is no more, has ceased to be, bereft of life, rests in peace, is deceased and popped its clogs. What on earth does HMV think is going to happen? Is it waiting for the patron saint of books to descend and somehow save it?

Virgin Megastore, the Mecca on the corner of Oxford Street and Tottenham Court Road is now a massive Primark, glitzy, expensively fitted out and full of stock and customers. That's reality, even in recession girl's shop till they drop but music and books they can buy online.

The only thing HMV can realistically do is run the business down, dumping its leases in a controlled retreat. The other alternative is to start selling dresses.

http://www.darcyblaze.com/

All that trading and still coming in with a £36 million pound loss, albeit down from £50 million. How much of a loss does HMV need to convince its share holders that trading in music and books is a dead parrot and is no more, has ceased to be, bereft of life, rests in peace, is deceased and popped its clogs. What on earth does HMV think is going to happen? Is it waiting for the patron saint of books to descend and somehow save it?

Virgin Megastore, the Mecca on the corner of Oxford Street and Tottenham Court Road is now a massive Primark, glitzy, expensively fitted out and full of stock and customers. That's reality, even in recession girl's shop till they drop but music and books they can buy online.

The only thing HMV can realistically do is run the business down, dumping its leases in a controlled retreat. The other alternative is to start selling dresses.

http://www.darcyblaze.com/