HMV sales drop as market conditions continue to be challenging. Photo: HMV Group
British entertainment retailer HMV has reported a decline in its sales over the summer, mainly due to the low number of releases during the period.
In its interim report, the company says like for like sales fell by 11.6 percent in the 20 weeks ending 15 September.
The group says the decline was mainly because of the anticipated lack of new releases in the music, visual and games markets during the summer.
Even as its share in these markets has increased, there is a significant decline in market value, taking the total group sales decline to 14.8 percent, which includes the impact from stores shut down previously.
The company claims that the portable digital devices, products and services continued to perform well.
"These numbers reflect the challenging markets in which we operate," said chief executive Trevor Moore
"However, the like for like decline was less marked towards the end of the period and we should be helped in the remainder of the year by a strong pipeline of new releases in the music, DVD and games markets ahead of Christmas."
HMV is reported to have lost £16.2m in the year ending April 2012 and although the company forecast a £10m profit for the current financial year, concerns about its capacity to achieve the target remain.
Underscoring the chief executive's comment on tough market conditions, analysts suggest that the firm, which has 243 shops in the UK and Ireland, could struggle under competition from supermarkets and other internet retailers.
HMV shares have fallen almost 95 percent in the past two years and slumped 8.85 percent to 2.78p in London on Friday, 21 September, 2012.
Seymour Pierce analyst Kate Calvert said: "We see no reason to change our sell recommendation and continue to believe there will be no let up in the structural pressures on the business from online or the supermarkets."
"We see HMV as a value trap with potentially insurmountable structural issues," she added.
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