HMV vows to turn around its fortunes

The retailer said today that it “will have adequate resources to continue in operation for the foreseeable future” but the trading environment has created uncertainties that “may cast significant doubt” on its future.

Fox said the sale of the entertainment group’s live music arm, which has more than doubled operating profit to £3.4m, is not a certainty after revealing it is under review.

He said: “HMV Live is a good business in a great part of the market. In an ideal world its a business that we would like to continue to own but with the debt as it is it could make a difference to our overall debt and leverage.”

The retailer recorded a loss from continuing operations, before tax and exceptionals, of £36.4m in the 26 weeks to October 29, versus £27.4m in the comparable period last year. Total sales from continuing business fell 17.6% to £364.9m.

The retailer is targeting growth through its profitable technology category which will represent 30% of its product range in the next two years.

HMV has refitted 144 shops to carry an extended range of digital technology and like-for-like revenues from the category climbed 42% following the overhauls. Like-for-like sales of headphones, speakerdocks and tablets rocketed 147% post-refits. The retailer expects to sell two million headphones this year.

Fox said HMV’s multichannel business remains an “opportunity” and that the ending of low value consigned relief on April 1 will help “level the playing field” with the likes of iTunes and Amazon.

The HMV chief executive also said there was opportunity to increase its services embedded on tablets and  mobile presence following the release of two apps. Fox said HMV’s nine Fopp stores were “trading nicely”.

He added: “We are not expecting the environment to get any easier in 2012. We are going to have to continue to work hard and develop our multichannel credentials in the coming year.”