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| Version 2 | Version 3 |
|---|---|
| HMV seeks to revitalise business | HMV seeks to revitalise business |
| (about 1 hour later) | |
| Shares in music and book retailer HMV Group have fallen 16% after the firm issued a profit warning as it launched a "radical" review of the business. | |
| HMV said sales had deteriorated further since the start of 2007 and that annual profits would be lower than expected. | HMV said sales had deteriorated further since the start of 2007 and that annual profits would be lower than expected. |
| The retailer is likely to close loss-making stores following a review of its entire estate of 421 HMV outlets and 329 Waterstone's book stores. | The retailer is likely to close loss-making stores following a review of its entire estate of 421 HMV outlets and 329 Waterstone's book stores. |
| The review could lead to job losses but HMV would not comment on this. | The review could lead to job losses but HMV would not comment on this. |
| 'Slow to adapt' | 'Slow to adapt' |
| Changing trends in the music market, with more and more consumers downloading songs rather than buying physical copies, has hit HMV hard. | Changing trends in the music market, with more and more consumers downloading songs rather than buying physical copies, has hit HMV hard. |
| The three-year transformation plan is exciting, radical and far-reaching Simon Fox, HMV chief executive See HMV's share price Is HMV still 'top dog'? | The three-year transformation plan is exciting, radical and far-reaching Simon Fox, HMV chief executive See HMV's share price Is HMV still 'top dog'? |
| "Waterstone's and HMV are great brands but have not adapted quickly enough to the way customers are now buying and consuming media," said chief executive Simon Fox. | "Waterstone's and HMV are great brands but have not adapted quickly enough to the way customers are now buying and consuming media," said chief executive Simon Fox. |
| "Our performance has suffered as a consequence." | "Our performance has suffered as a consequence." |
| HMV said group like-for-like sales - which strip out the impact of store openings and closures - were down 3% In the nine weeks to 10 March. | HMV said group like-for-like sales - which strip out the impact of store openings and closures - were down 3% In the nine weeks to 10 March. |
| As part of a three-year turnaround plan, HMV plans to save £40m by 2010 by reviewing all aspects of its business, including its stores, supply chain and administrative operations. | As part of a three-year turnaround plan, HMV plans to save £40m by 2010 by reviewing all aspects of its business, including its stores, supply chain and administrative operations. |
| Unprofitable stores plus those deemed surplus to requirements following Waterstone's purchase of Ottakar's last year are likely to be closed. | Unprofitable stores plus those deemed surplus to requirements following Waterstone's purchase of Ottakar's last year are likely to be closed. |
| New initiatives | New initiatives |
| HMV also plans to refurbish its stores and introduce new products including portable music players and gift stationery at Waterstone's. | HMV also plans to refurbish its stores and introduce new products including portable music players and gift stationery at Waterstone's. |
| It will also launch a social networking site for music and film enthusiasts and increase investment behind its own online retail site. | It will also launch a social networking site for music and film enthusiasts and increase investment behind its own online retail site. |
| Today's update leaves investors requiring a further leap of faith in the group's potential turnaround prospects Keith Bowman, Hargreaves Lansdown Stockbrokers. | Today's update leaves investors requiring a further leap of faith in the group's potential turnaround prospects Keith Bowman, Hargreaves Lansdown Stockbrokers. |
| HMV said it was "confident" that its proposals would improve its fortunes, having seen its profits fall 20% last year. | HMV said it was "confident" that its proposals would improve its fortunes, having seen its profits fall 20% last year. |
| "The three-year transformation plan is exciting, radical and far-reaching," Mr Fox added. | "The three-year transformation plan is exciting, radical and far-reaching," Mr Fox added. |
| HMV shares closed down 15.9%, or 24.25 pence, at 128.5p. | |
| Analysts responded coolly to HMV's announcement, saying the firm's track record in managing costs was not a strong one. | Analysts responded coolly to HMV's announcement, saying the firm's track record in managing costs was not a strong one. |
| "Investor hopes have again been dashed via another downward estimate to profits," said Keith Bowman, from Hargreaves Lansdown Stockbrokers. | "Investor hopes have again been dashed via another downward estimate to profits," said Keith Bowman, from Hargreaves Lansdown Stockbrokers. |
| "Today's update leaves investors requiring a further leap of faith in the group's potential turnaround prospects." | "Today's update leaves investors requiring a further leap of faith in the group's potential turnaround prospects." |