HMV reports weaker sales growth

Entertainment retailer HMV has seen sales growth at the group slow sharply.

HMV Group, which is due to hold its annual general meeting on Friday, said like-for-like sales increased 1.3% in the 18 weeks ended 30 August 2008.

But this marks a significant slowdown from the 10.1% growth seen previously.

HMV UK & Ireland's sales grew 4.3%, driven by an increased mix of games and technology - but sales at its chain of Waterstone's bookstores were weak.

HMV International's sales also expanded, growing 2.9% due to a wider mix of games in HMV Canada and growing market share across all categories.

But sales at HMV's Waterstone's bookstore chain were comparatively lacklustre.

Excluding last year's figures from the Harry Potter and the Deathly Hallows novel, Waterstone's like-for-like sales slipped 1.7%, though its market share remained steady.

Share in the group felll 2% on the news.

Turn around

In 2007, HMV began a three-year programme to turn around the business, after being hit by falling profits.

The firm - which operates 379 HMV stores worldwide and 313 Waterstone's outlets - has come up against strong competition from supermarkets and music downloads.

But it has fought back, introducing new video game ranges and stores to boost profits.

It opened its largest Next Generation store to date on 4 September at shopping centre Liverpool One, and hmv.com is poised to launch an MP3 digital download and streaming offer later this month.

A pilot loyalty card scheme, and a pre-played games offer, will launch before the end of the year.

In July HMV had reported full-year pre-tax profits to 26 April up 25.5% to £56.6m, helped by strong demand for video games.

Like-for-like sales grew 7.3% across the group, rising 11.4% at HMV UK & Ireland, while its Waterstone's business saw sales rise by 3.3%.

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