Liverpool One holds key to HMV turnaround plan

Sep 6 2008 by Tony McDonough, Liverpool Daily Post

Liverpool One holds key to HMV turnaround plan

THE new-format “next generation” at HMV’s Liverpool One store will be the key to the success of the retailer’s turnaround strategy.

The 15,000 sq ft music shop opened its doors earlier this week and will feature a social hub providing access to entertainment websites, multi-player games zones and transactional kiosks.

The store design also places greater emphasis on technology and LCDs. It has a 20-ft wall show- casing Apple products and access- ories, and what HMV claims is the largest Blu-Ray high definition department outside London, with more than 3,000 titles.

HMV, which includes book chain Waterstones, has launched a fightback against cut-throat competition from internet downloads and the major supermarkets.

Yesterday, the company said its revival plans were on track as it reported a rise in sales and progress with the new store roll- out programme.

HMV UK & Ireland saw comparable sales grow 4.3%, in the 18 weeks to August 30, thanks to an increased focus on games and technology.

A 4.3% fall in like-for-like sales at its book arm Waterstone’s, struggling against tough comparatives from last year’s Harry Potter boost, proved a drag on group-wide performance, which saw comparable sales lift by a more muted 1.3%.

But HMV said it was a solid start to the year and assured it was cracking on with its turnaround strategy by opening the doors to the Liverpool One store – the biggest of its new format outlets so far. It will also launch an HMV UK loyalty card scheme and second-hand games offering by the end of the year, while plans are in place to introduce MP3 digital downloading later this month.

Shares slid 4% in early trading as the sales figures represented a slowdown on the 10.1% surge seen in the previous quarter.

HMV said excluding the impact of last July’s release of Harry Potter and the Deathly Hallows – the last book in the series – Waterstone’s comparable sales fell by 1.7%, with the overall group notching a 2.2% rise.

HMV chief executive Simon Fox said: “In what is, undoubtedly, a tough consumer environment, the solid start made by the group to the new financial year means that our plans are in line with the board’s expectations and I remain confident that our strategic initiatives are on track.”

tonymcdonough