Profits down in "difficult" year for HMV

Profits at HMV were down by over half for the latest financial year, in what the company labelled a "difficult" period.

For the 52 weeks ended April 28, the entertainment retailer recorded profits of GBP 48.1 million, compared to 98.2 million in 2006.

Sales were up 3.8 per cent, inclusive of a like-for-like 3.5 per cent fall, to GBP 1894.5 million.

"The year was difficult for HMV Group, and we performed below our expectations," said HMV . "Market shifts were even more severe than expected."

However, the retailer completed a strategic and operational review in March and says it now plans to forge ahead in three key areas - protecting its core business, saving costs aggressively, and growing into new channels and related products.

As well as expanding into the sales of electrical goods, the retailer intends to install dedicated gaming areas for consumers to sample videogames.

The retailer also said it will launch a dedicated social networking website to "deliver film, music and games-related content to its online community."

As part of its focus on market leadership, the retailer also said that it is reviewing HMV Japan, with discussions that "may or may not lead to a disposal of this business."