Page last updated at 12:43 GMT, Thursday, 11 December 2008

Book sales fall hits Waterstone's

Jade Goody at her book launch
Without Harry Potter, Waterstone's is searching for magic elsewhere

HMV has said that falling demand for books has dented sales at its Waterstone's business as it suffers from a downturn in consumer spending.

Like-for-like sales dropped by 3.1% in the 26 weeks to 25 October - and by 1.4% when adjusted for the impact of the final Harry Potter book last year.

Sales of music rose, HMV said, while its move into video games was also paying off, though sales have slowed.

Group pre-tax losses narrowed to 27.5m from 28.7m a year earlier.

Like-for-like sales at the HMV music chain were ahead 1.6%, with operating losses over the six months - traditionally its quieter half of the year - narrowing by 400,000 to 12.7m.

Celebrity factor

Shares in HMV fell sharply after analysts downgraded profit forecasts in the wake of the results - but later pared most losses.

Seymour Pierce analyst Freddie George said he expected the firm to make an annual profit of 58m, from the 65m previously predicted.

"Game sales are slowing, CD and DVD sales are up against difficult comparatives over the last 18 months and there is the long term niggling concern that downloading will take ever greater sales of DVDs and CDs," he added.

HMV said that the book market had seen a "marked deterioration" in the five weeks to 29 November - a key part of the pre-Christmas trading period.

A downturn in spending on celebrity hardback books - a mainstay of the Christmas trade - was affecting the book market, HMV chief executive Simon Fox said.

"I would say the number of titles and quality of titles is the same year-on-year. But rate of sale is lower than last year and lower than we would want them to be. They are clearly a discretionary spend."

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