British retail chain HMV Group had a busy day today. After announcing that it will enter the live business via a joint venture with Mama Group, the retailer reported that sales during the all-important Christmas shopping period had been satisfactory, despite the overall economic slump in the UK that left two retailers – Woolworths and Zavvi – bankrupt over the holidays.
CEO Simon Fox told Billboard that the company over Christmas sold “7% more albums than we did last year. So the music market is not dead.” Fox said the increase resulted in total sales of 9 million CDs for that period. In the five weeks that ended on January 3 HMV increased total revenues by 4.2% while same-store sales grew 1.4% during that period. In the ten weeks until January 3 total sales increased 2.5% while like-for-like revenues were down 0.3%.
Looking only at HMV’s UK & Ireland business, revenues in the five week period grew 5.8% and 3% like-for-like, respectively. The ten-week window saw total UK & Ireland sales increase 3.4% and 0.6% on a like-for-like basis.
In addition to these rather encouraging numbers, HMV announced that it will buy 14 stores of the Zavvi chain from its administrator. The sticker price for these stores and their stock – 9 in the UK, 5 in Ireland – is £700,000 ($1m). Factor in rebranding and remodeling and the acquisition will cost HMV approximately £2 million ($2.9m).
In the year to November 30, these 14 outlets garnered combined sales of £55 million ($80m) while producing an EBITDA of £2.7 million ($3.9m). The takeover will preserve some 270 jobs.
