HMV sales fell 12.1 per cent for the last financial year, with the retailer posting a loss of 16.2m.
The loss is roughly in-line with what the entertainment retailer said it would lose back in May.
In total HMV generated 923.2m last year. Video games sales plunged 17 per cent year-over-year, while video fell 13 per cent and physical music dropped 19 per cent.
It means HMV’s other areas – which includes a growing technology business – has grown in importance. Technology and other departments now account for 14 per cent of the Group’s sales, up from 12 per cent the prior year.
The sales have also been impacted by some restructuring at the Group, which includes some changes to Head Office, the discontinuation of its Live music division and the movement and closure of some stores. HMV UK closed 23 stores and opened one last year. Across UK, Hong Kong and Singapore, HMV now operates from 252 stores.
But it’s not all bad news for HMV, in fact the firm expects to generate a 10m profit next year.
Over the past six months, HMV has renegotiated better deals with its music, DVD and video game suppliers. As a direct result, it has secured a new 220m banking facility (which has now been extended until September 2014 following the sale of the HMV Hammersmith Apollo for 32m).
Its technology department, which is run by games and tech boss Ewan Pinder, has also been significantly expanded and generated around 90m of the firm’s turnover. In total, HMV’s retail operation saw its margins increase. And the firm hopes its online business will grow now that the Channel Island tax loophole has been closed.
HMV also expects the games market to decline again over the next year, but not as fast as music or film. The entertainment giant says that in 2014 retail game sales should have an annual worth of 2.4bn. And the firm has seen its market share increase following the administration of GAME Group.
The sales are certainly disappointing for HMV and the past year has been a significant challenge for the retailer. But the movement into growing sectors, the new working relationship with its suppliers, and the increased opportunities for games following the closure of GAME stores, means that the company’s target of 10m profit next year is possible.