Last month we brought you the news that retailer HMV faced an uncertain future as it looked to sell off some assets to raise cash. Now today we have news of HMV UK and sales of video games.
The retailer has recently reported an 8.2 percent drop in like-for-like sales of video games in the busy five week lead up to Christmas, and according to The Telegraph the company is considering reducing its video game business. It’s not all doom and gloom for the retailer though as it saw a small improvement on the final nine weeks of 2011, with sales falling 9.8 percent.
HMV did lose 16 percent of the video games market in the UK with competition from online stores and supermarkets. This has led the company to consider how much room it dedicates to the sector in its brick and mortar stores. Chief Executive Simon Fox is considering only selling the big new titles and not stocking older software.
The company currently has £160 million of debt as well as falling sales, but a recent decision to stock larger levels of technology seems to be paying dividends. These types of sales leaped 51 percent at stores that had been open for a year or more for the five weeks after 144 stores were refitted. This was to promote sales of the likes of tablet PCs and headphones, and currently accounts for 12 percent of total sales with headphones taking fifty percent of that.
It is hoped that technology sales will continue to grow during the next year, and by enough to counteract falling sales of DVDs and games. HMV is not the only company seeing falling sales of boxed video games though, as the industry as a whole saw a drop of seven percent last year across the board.
Many gamers wait to get a new title so the price may drop saving them money, but less profit for the retailer. Reuters is reporting rival retailer the GAME Group has warned it may break the terms of its loans after reporting low trading over Christmas. Sales across its stores where worse than the retailer had estimated before Christmas.
Sales over the last eight weeks had dropped 14.7 percent compared to a year ago, and 10 percent for stores open a year during the 49 weeks to January 7th. It also lost 13.1 percent of the overall games market. Do you use either HMV or GAME to purchase your new games?