Entertainment giant HMV is facing troubling times as the chain revealed that it is to close 60 stores (including some Waterstones bookshops) over the next 12 months.
That number represents 9 per cent of the chain’s 700 outlets. HMV has 285 shops in the UK and Ireland.
Shares in the company have dropped 24 per cent following the announcement.
The drastic move follows poor Christmas sales on the UK High Street. Sales for the five weeks ending January 1st 2011 were down ten per cent year-on-year with store sales falling 13 per cent.
The severe weather and "challenging trading conditions", which lead to lower than expected sales of games, DVDs and CDs, were blamed for the slump.
Currently DVDs account for 34 per cent of HMV’s business, with music claiming 22 per cent, games and technology 19 per cent and books (thanks mostly to Waterstones) 25 per cent.
In 2010 the UK and Ireland arm of the business generated 1.2bn in sales and an operating profit of 75.6m.
The chain also confessed that it’s struggling to avoid breaching loan terms, hence the seemingly savage decision to close stores and announce its financials a week earlier than had been anticipated.
A number of other cost-cutting measures will be put into effect that should save around 10m a year.
"The pace of change in the markets in which we operate underlines the urgency with which we must continue to transform this business," chief executive Simon Fox stated.