HMV has warned that tough trading conditions “may cast significant doubt” over its future after reporting widening losses and revealed it is looking to sell its Live music business.
The ailing music retailer has appointed Citigroup to find a buyer for its fast-growing music venue and festival business, in its efforts to cut its £163m debt pile.
Chief executive Simon Fox is still counting on the extra Saturday before Christmas this year to help improve sales.
“This is a crucial week. It is when the high street comes into its own, you start passing the cut off dates for online ordering but we are in an environment that is very difficult on the high street,” he said.
HMV, which has issued three profit warnings in 2011, said pre-tax losses increased to £36.4m in the six months to the end of October from £27.4m in the same period last year.
Like-for-like sales were down 17.6 per cent and fell by a further 13.2 per cent in seven weeks to 17 December.
Fox believes HMV Live, which doubled its first-half profits to £3.4m, could achieve a price of around £60m. Yet analysts are doubtful, adding that a sale would have a limited affect on the group’s financing.
HMV has refitted 144 of its 252 stores to focus on tech items like headphones, which it said has helped boost sales of those products by 42 per cent.