HMV allays fears about the future of its Brighton stores

Posted On 05 Jan 2011 at 4:11 pm

HMV has tried to allay fears that it may close one of its two Brighton shops in the coming months after reporting a slump in Christmas sales.

Up to 20 jobs – not including Christmas casuals – would be at risk in each store if the company did decide to rationalise in the town.

The fears were prompted by a public announcement about store closures by the company.

It said that group sales were down 10 per cent over the Christmas period and profits would be affected.

The parent company, HMV Group, also said that it was having trouble meeting the terms of a bank loan.

It told investors that business had been badly affected by the snowy weather and challenging trading conditions, with most of the big music and film releases timed for Christmas shoppers.

And it announced plans to close 40 of its 285 HMV stores across Britain with some expressing fears that one of the Brighton branches would be among the casualties.

HMV has shops in Western Road and Churchill Square in Brighton.

Safe

The company also owns Waterstone’s and plans to shut 20 of its 320 branches although the branch in North Street, Brighton, is believed to be safe from closure.

Sales figures for the bookshop chain were about the same as the year before.

Gennaro Castaldo, HMV’s head of press and public relations, said: “There’s no reason why you couldn’t have two stores within one town where they operate to different markets.

“Western Road appeals to students while Churchill Square attracts more mainstream shoppers and families.

“Brighton is a hugely important town for us and we hope to be there for a long time to come.

“Music is such an important facet of life in Brighton.

“We sponsor the Great Escape music festival and we see all sorts of synergies with that.”

He said that it was impossible to give cast-iron guarantees but Brighton remained a key market for the company.

Two of HMV’s big rivals for CD and DVD sales went out of business two years ago.

Woolworths, which had a branch in Western Road, and Zavvi – formerly the Virgin Megastore – in Churchill Square closed within weeks of each other.

Tougher

The switch to digital downloads has accelerated, though, making life tougher for stores like HMV at a time when the supermarkets have also made inroads.

The same trends can be seen in computer games, another of HMV’s main product lines.

The competitive environment for bookshops is also becoming tougher for similar reasons.

The biggest local rival to Waterstone’s – Borders in Churchill Square – closed just over a year ago.

HMV Group said that sales in the five weeks to Saturday 1 January were down 10.2 per cent compared with the previous year.

It blamed a fall of 13.6 per cent slump at its HMV music stores in Britain and Ireland.

Mr Castaldo added: “We are actually talking about a relatively small number of stores across HMV and Waterstone’s chains – less than 10 per cent of our combined estates, which are likely to be located primarily in large city conurbations and may be in close proximity to each other – thus resulting in a degree of duplication in relation to local demand.

“The vast majority of HMV stores around the country will not be affected and we will look to ensure that the specialist offer and service that we make available to our customers in these locations is maintained.

“Likewise, we will look to redeploy any affected staff where we possibly can.

“This move in no way signals any intention to pull out of entertainment retail, which remains at the heart of our offer, and is ultimately aimed at safeguarding our core business as we continue our transformation into a broad-based entertainment brand that now also encompasses live music venues and festivals.”

* Next, with branches in Churchill Square and Hollingbury, also reported a tough festive season.

Yesterday the clothes shop chain said that sales had dropped £22 million because shoppers had stayed away when it snowed in December.

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