HMV gets Xmas sales still flagging

Struggling British entertainment retailer HMV got a little respite over Christmas as sales declines slowed, providing a glimmer of hope the firm may have a future.

The group, which last month posted wider first-half losses, said it was in danger of going out of business and put its HMV Live division up for sale, said on Monday sales at stores open over a year fell 8.2 per cent in the five weeks to 31 December.

That was an improvement on like-for-like sales down 13.2 percent in the seven weeks to December 17 and largely reflects an extra Saturday (24 December) of Christmas trade this year.

HMV, which trades from 256 stores in Britain and Ireland, employing 4,500, said in the 144 stores refitted with an extended technology range of portable digital products, technology like for like sales were up 51 per cent in the five week period.

"The continuing actions to focus the business and to expand our technology offering are beginning to show through," said chief executive Simon Fox.

"We are seeing a combination of a slowing of the decline in music and film, and acceleration in the growth of technology. Undoubtedly trading conditions and the consumer environment remain challenging, but we remain confident in HMV's future prospects."

Saddled with 164 million pounds of debt the ninety-one-year old firm is suffering as a downturn in consumer spending accelerates the long-term decline of its core CDs and DVDs markets.

HMV, famous for its Nipper the Dog trademark, is also facing intense competition from internet retailers and the rise of digital downloading as well as the march of grocers like Tesco into general merchandise ranges.

Shares in the firm, the last national music and movies chain on Britain's town centre shopping streets. have lost 88 per cent of their value over the last year.