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HMV recovery boosted by Christmas sales
Music retail chain and Waterstone's owner HMV provided some good news from the high street today after reporting a 9.4% like-for-like sales jump.
The company's music and entertainment arm, HMV UK and Ireland, enjoyed a double-digit same-store sales rise of 14.1% for the five weeks to January 5, with total sales up 16.1%. And book retailer Waterstone's saw like-for-like sales up 4%, although total sales were up by just 0.5%.
The online arms of both the music and book retailer delivered "rapid" sales growth, the group said.
HMV launched a turnaround plan last year after profits tumbled amid competition from music downloading and supermarkets. The plans included store revamps, a focus on big-selling games and the roll-out of "Next Generation" stores featuring download stations and smoothie bars.
Chief executive Simon Fox hailed the Christmas performance as "highly successful".
"Less than a year into our transformation programme the initiatives we are undertaking to revitalise our business have helped to deliver a highly successful Christmas," he said.
HMV's group like-for-like sales growth during the 10 weeks to January 5 was 7.9%, with the HMV arm up 9.8% and Waterstone's ahead 3.3%.
The company reported like-for-like sales of 5% across the group in the 26 weeks to October 27 - slower than the 6% growth seen in the first 18 weeks.
HMV shares were up 15% in early trading.
Mr Fox said the group had enjoyed its "best Christmas ever" in terms of sales growth, and had been "a winner" on the high street.
The group's fortunes contrasted with those of retailers like Marks & Spencer and PC World owner DSG International, which both saw like-for-like sales drops over the Christmas period.
Mr Fox said: "I think our figures speak for themselves.
"The product market we operate in has been buoyant - very strong for
DVDs and a very strong Christmas for games, with demand outstripping supply."
He added: "Our average transaction value is around 10. I fully understand why higher ticket value retailers are not doing so well."
Over Christmas, the four best selling DVDs for HMV were Simpsons The Movie first, followed by Transformers, Bourne Ultimatum and High School Musical 2.
Big selling books at Waterstone's were by Nigella Lawson, Jamie Oliver and Jeremy Clarkson.
Sales growth at Waterstones.com was 100% over the Christmas period, Mr Fox added.
HMV said expectations for full year profit-before tax would be at the "upper-end" of expectations. The market estimates ranged between 43 million and 53 million for the year to April this year.
Broker Seymour Pierce hailed the Christmas figures as a "very strong update".
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Thursday 24 May 2012
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