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London: Music, DVD, games and book retailer HMV Group plc said on Friday that its sales continue to grow, but at a much slower pace as consumers begin to halt purchases as the economic climate worsens.
HMV said that like-for-like sales across its group rose 1.3 per cent in the 18 weeks to the end of August, significantly slower than the 10.1 per cent growth previously.
The group's book retailing arm, Waterstone's, was the weakest link, posting a 4.3 per cent slump in like-for-like sales, reflecting a weaker book market and tough comparisons with the previous period.
Shares in the company dropped 2.3 per cent after the trading update to 128.75 pence ($2.27).
However, chief executive Simon Fox said that the results were in line with expectations "in a tough consumer environment. I remain confident that our strategic initiatives are on track," Fox added in a statement ahead of the company's annual general meeting later yesterday.
The three-year review is aimed at saving some £40 million by 2010 and at transforming HMV's business as it faces growing pressure from the growth of digital downloading and competition from online retailers and supermarkets.
Part of the plan is to conduct around a third of its sales online, expanding its range of digital products and launching a social networking site for music and film enthusiasts.
In July, it reported that the recovery plan was ahead of schedule as full-year profit increased nearly fivefold, boosted by the sale of its unit in Japan.
HMV International's like-for-like sales growth of 2.9 per cent reflected the rapidly increasing mix of games in HMV Canada - now accounting for more than 10 per cent of sales - as well as a further increase in market share across all categories, it added.
With the company approaching its peak selling period ahead of Christmas, Fox said that it was focused on providing "the very best offers from what is shaping up to be a strong lineup across all product categories."
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