Fears for Irish jobs as HMV hit by sales slump
Published 20/12/2011 | 05:00
Staff at 16 HMV outlets in Ireland are on tenterhooks after the retailer warned that its future is uncertain following a slump in sales.
The British group -- which has been battling with falling revenue -- employs more than 300 people in Ireland at 16 stores. It said yesterday that group like-for-like sales sank 11.9pc in the first half of its financial year, while it posted a £50.1m (€60m) total loss in the period.
It cautioned that there were now "material uncertainties which may cast significant doubt on the group's ability to continue as a going concern in the future".
HMV's predicament has continued to worsen even as it tries to implement new revenue streams and offerings to stem the sales slide.
Earlier this year, it offloaded its Canadian HMV business to UK-based retail-restructuring firm Hilco -- the same company that acquired troubled Irish fashion business A-Wear in recent weeks.
Earlier this year, it also sold its Waterstone's bookshop arm in a bid to cut debt. The company has net debt of £163.7m.
Shares in HMV tumbled more than 25pc to just 2.9p in London. That gave the company a market capitalisation of just £12.3m.
HMV said that its total retail sales plummeted 19.4pc in the 26 weeks to October 29, while the group's pre-tax and pre-exceptional loss for the period was £36.4m.
Despite the dire performance -- which HMV stressed didn't include the crucial shopping weekend just passed -- the company's directors said they had a "reasonable expectation" that the firm would be able to meet its liabilities as they fell due and had adequate resources to continue in operational existence for the foreseeable future.
Chief executive Simon Fox has been betting his chips on sweeping store revamps and disposals of non-performing outlets in order to turn the ailing retailer around.
He said yesterday that HMV was now "seeing the benefit" of the store upgrades, with higher sales among technology categories.
"Like all consumer-facing companies, we are facing tough trading conditions, but we continue to push forwards through this period," he added.
He hadn't ruled out trying to raise more equity from shareholders in the new year, he confirmed.