HMV reports disappointing sales; to terminate Waterstone’s agreement with Amazon |
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Tue, 09 May 2006 16:15
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LONDON - Music and book retailer HMV Group PLC reported a further slide in book and music sales in April, but said that it was on target to meet analysts' expectations as far as full year profits were concerned.
Like-for-like sales in HMV stores were down 11.4 percent in the 16 weeks to April 29. In the book division of Waterstone's, there was a 5.6 percent dip in sales. Overall the group had a 5.8 percent drop in sales. "In January, the group commented on the difficult sales trends in the UK ... these trends have persisted," HMV said in a statement. Full-year profits were expected to be in the range of £93 million to £103 million, which is in the middle range of analysts’ expectations.
HMV has seen most of its customers migrate to online retailer, but the group said that sales on the HMV website, which was relaunched in November were strong. The group said that "the board is making good progress on the appointment of a successor to Chief Executive Alan Giles, and a further announcement will be made in due course."
HMV also announced that it was terminating its agreement with Amazon and would be launching a separate website for Waterstone’s division later this year. In a trading update, HMV confirmed that Waterstone's "is terminating its partnership with Amazon and in the autumn of 2006 will launch its own online service which will reflect better the brand's specialist bookselling credentials".
Waterstone's managing director Gerry Johnson said that the book division felt this was the right time to launch its separate website, "Waterstone's has been undertaking a strategic review of its internet activities for some time and we have concluded that the time is now right to launch its own online service," he added.
Lat week Tim Waterstone, the book store's founder had backed out of a £280 million offer to buy the stores back after saying that no one could have met the conditions imposed by HMV.
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