Entertainment retailer HMV has announced plans to shift its focus to ticketing, digital products and live events, after a “difficult and turbulent year”, which resulted in it posting losses today of £121.7m for the 53 weeks to 30 April after recording a profit of £49.2m the previous year.
The company said the group’s pro forma profit before tax and exceptional items declined by 61pc to £28.9m, on revenues which decreased by 7pc to £1,868.3m. Adjusted earnings per share from continuing operations fell by 67pc to 3.8pc.
Earlier this week, the company announced it is selling off its 121 Canadian stores to Hilco UK for £2m. It has also just completed the sale of its book business Waterstone’s to A&NN for £53m.
“We have taken decisive action to restructure and successfully refinance the group,” said Simon Fox, chief executive of HMV Group.
"HMV remains a world-class entertainment brand, and we now have a very clear focus and strategy to drive cash generation and cost reduction, reinvigorate the customer offer and further diversify the group into the growth areas of live, ticketing and digital."
Philip Rowley, chairman of the group, said the separation of HMV and Waterstone’s, and the sale of HMV Canada, are the right decisions at this time.
“The sale of Waterstone’s, in particular, has enabled the group to agree with its banks a revised, two-year £220m credit facility, which strengthens the capital structure of the group and enables us to continue evolving our strategy to deliver value from the HMV UK and Live businesses.
“While we operate in rapidly changing markets, we believe that there is a clear place for HMV as a specialist retailer of entertainment products and that by rebalancing the space in many of our stores away from declining categories to a focused range of high-growth technology products, we will both enhance our offering to our customers and strengthen our sales base.
“In addition, as we evolve as a broader-based entertainment business, we see strong opportunities to combine under one format a focused range of portable digital products and accessories, visual, games and music and, increasingly, access to live and digital content.”
Article courtesy of Businessandleadership.com