HMV has today provided further evidence of its resilient trading strategy with like-for-like CD sales increasing by 1.5% and DVD and BluRay sales increasing by 0.5% in a year with few blockbuster movie releases. Since the acquisition of the business by Hilco Capital in April 2013, the property portfolio has been restructured with many stores relocated to smaller locations better suited to the product offering.
HMV has today provided further evidence of its resilient trading strategy with like-for-like CD sales increasing by 1.5% and DVD and BluRay sales increasing by 0.5% in a year with few blockbuster movie releases. Total sales reached £365.7m in the year to December 2014 despite a 34% reduction in retail space. Since the acquisition of the business by Hilco Capital in April 2013, the property portfolio has been restructured with many stores relocated to smaller locations better suited to the product offering. Sales of CDs increased by 1.5% on a like-for-like basis despite an overall market decline of 4.9% in the same period. As a result, HMV's total market share climbed to 27%. Despite the fall in retail space, HMV reclaimed its place as the country's largest retailer of physical music over the key Christmas trading period.
Sales of vinyl albums increased by 170% in the year with over 350,000 units sold in the year, around 30% of the total market. Vinyl sales in the week before Christmas 2014 were the highest at HMV since the mid-1990s. With fewer blockbuster movie releases than normal in 2014, the DVD market came under more pressure with a decline of 13% overall. But, with like-for-like sales increasing by 0.5%, HMV managed to increase its market share to 22% of the visual market making it the largest retailer of DVD and BluRay in the UK over the key Christmas trading period.
In the two weeks before Christmas, HMV was the country’s largest retailer of physical entertainment products, accounting for 1 in 3 sales of CDs and DVDs.
HMV had a very strong Black Friday weekend, preserving margins throughout, but, in common with other high street retailers, noticed a softening of sales in the middle part of December.
Over 300,000 customers signed up to the renewed Pure rewards scheme during 2014, qualifying them for front-of-line access to over 250 live in-store gigs and album signings as well as an increasing number of 'money can't buy' gifts and experiences such as trips to movie premieres and international music and film festivals.
The programme of hmvLive events was significantly ramped-up during the year with over 40,000 customers and Pure members attending live in-store gigs and signings across the country. The business has enjoyed support this year from artists including Sam Smith, Ed Sheeran, Take That, Olly Murs, Kasabian, Clean Bandit and many others with some appearances being streamed live on hmv.com from the company's event venue, "363", in London's Oxford Street.
The currently non-transactional website, hmv.com, now welcomes 1,000,000 unique visits per month and is being rolled out to Ireland and Canada in the coming weeks. With album and movie reviews and recommendations, entertainment industry news and coverage of HMV events, the website is a new approach for the company to its on-line presence and HMV expects to integrate eCommerce capabilities over the early months of 2015 across all of its operating territories.
Ian Topping, CEO of HMV in the UK said:
"The right-sizing of the property portfolio and our continued focus on HMV’s key product categories has led to a much stronger business proposition. An excellent value for money product range with strong in-stock positions combined with a focus on live events and our Pure rewards programme have driven a renewed appreciation of the role of HMV on the High Street."
Paul McGowan, CEO of HMV owners, Hilco Capital, said:
"HMV has captured more and more market share in a year when major new movie releases have been scarce and there have been only a few major album successes, With a bumper year of new releases already planned for 2015 we expect to have overall growth in like-for-like DVD and BluRay sales as well as continued growth in the physical music sector with vinyl also expected to continue its revival.
I am particularly pleased with the impact of the many live gigs and album signing events across the country which have focused our energies on re-engaging fans with the entertainment industry and re-establishing the relevance of HMV as the Home of Entertainment."