Music retailer Golden Discs saw its annual day-to-day losses grow to €1.58 million in its last fiscal year from €164,974 as it closed four stores in Dublin and grappled with competition from online music providers, writes Arthur Beesley, Senior Business Correspondent
Managing director Steve Fitzgerald attributed the bulk of a €6.12 million drop in turnover to €29.89 million to the closure of stores at Grafton Street, North Earl Street, the Ilac Centre and Artane. Such closures brought the number of Golden Disc stores to 23.
The firm received a once-off payment of €5.6 million in the previous year for the surrender of the lease on its Grafton Street outlet to Marks & Spencer.
Mr Fitzgerald said like-for-like sales in the chain, the largest Irish-owned music retailer, were down by about €1 million in the year to March 2007. The pretax loss was €1.45 million, down from a pretax profit a year earlier of €5.59 million after payment for the Grafton Street lease.
While sales this year are set to match the level seen last year, he believes Golden Discs will be able to eliminate its losses in the current period.
Asked if profits were likely, he said: "That's the goal that we're aiming at, there or thereabouts... Whatever about profit, we'll be out of loss-making."
Given the threat to its music franchise, Golden Discs has expanded its offering to include iPods and iPod equipment, DVDs, books, computer games, software and T-shirts.
The trading performance over Christmas was positive, Mr Fitzgerald said, citing good sales of music by X-Factor winner Leona Lewis and country singer Garth Brooks and the Simpsons Movie and box-sets of the Sopranos and Sex in the City television series.
"Diversification into new products is going to be essential," he said.
While CD sales remain under pressure from illegal and legal downloading, newspaper promotions, online retailers and supermarkets, Mr Fitzgerald made the point that paid-for digital downloads have a current market share of only 4 per cent.
He said Golden Discs' use of discounted "campaign" offerings for CDs and "multi-buy" DVD box sets has proved a success and will be continued.
"Why would you download or burn a CD when you can buy it for €5 or €7?" he said.
