Sales are down and it's not music to HMV's ears |
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Fri, 30 Sep 2005 16:05
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LONDON: Music company HMV Group Plc is the latest victim of the consumer downturn. Its same-store sales in the U.K. and Ireland fell by 9.2 per cent in the first half, which the company claimed, was partly due to the July 7 bombings and its aftermath.
The company, which has substantial operations in Asia, Australasia and Canada, said its group same-store sales fell 4.4 per cent. However, its international businesses performed better than the U.K., with like-for-like sales going up 7.7 pct and 6.6 pct at HMV Canada and HMV Asia-Pacific respectively.
Chief executive officer Alan Giles told newspersons that effects of terrorism were by no means confined to central London, and these have affected other centres as well. He said the company hopes to reduce costs by 2 to 3 per cent during the current fiscal and save up to 10 million pounds. It will cut down on marketing, will not replace employees who leave and control staff costs. However, much will depend on Christmas sales, Giles added.
Music companies in general are looking at releases from pop stars like Robbie Williams and Franz Ferdinand to to save their music sales. Even DVD releases like "Star Wars Episode III" and "War of the Worlds" are looked upon as possible areas of help. But the star attraction this festival season will be games consoles. Sony has already come out with its PSP system and Microsoft is planning the launch of its Xbox 360.
HMV had recently made a 96-million-pound buy-out bid on bookstore Ottakar's Plc. However, analysts are expressing doubt, as it may not stand the test of competition laws. HMV already owns the Waterstone's chain, and if successful, the Ottakar's bid will give it over 50 per cent of the specialist book market.
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