MUSIC RETAILER HMV and its wholly-owned book chain Waterstone's have reported sharply reduced profits in Ireland as consumers turn to online music and publishers engage in promotional pricing.
Newly filed accounts for HMV Ireland, which operates nine stores in the Republic, show that operating profits fell to €5 million in the year to April 2007 from €7.7 million in the previous fiscal period. The chain, which has turned to the DVD movie form to restore sales in light of the turn away from music CDs, said that its Irish sales fell 2.4 per cent in the same period to €68.6 million.
"This reflected a highly competitive retail market for entertainment products. Operating profit performance reflected the effect of the challenging trading conditions, offset by tight control of operating costs," company directors said in their report.
Waterstone's Booksellers Ireland said in its financial statements for the same period that operating profits fell by a third to €1.4 million from €2.1 million. Sales grew by only 1 per cent to €27.6 million. Its directors attributed the drop in profits to a "competitive and highly promotional book market, together with upwards pressure on property rental costs".
A HMV spokeswoman in London indicated that trading here had picked up in line with an improvement in the performance of the group at large during the Christmas period. The group has hired singers Glen Hansard, Ronnie Drew, Shane McGowan, Van Morrison and and mother of the late Phil Lynott for a new promotional campaign beginning on St Patrick's Day.
"The figures filed in the Companies Office are specifically related to the Irish performance for the full year to the end of April 2007," said the spokeswoman.
"Those figures are over nine months old and the group has made some significant strategic changes to improve performance since then. The initiatives that have been put in place have really started to take hold. We're only a year into a three-year turnaround plan, but we are delighted with progress to date and last Christmas, the group produced its best like-for-like figures ever."
HMV's music bestsellers in Ireland last Christmas included Garth Brooks's Ultimate Hits collection, Michael Buble's Call Me Irresponsible, Shayne Ward's Breathless and the Mothership collection from Led Zeppelin. Irish bestsellers at Christmas included Ronan Collins' Showband Hits, Gift Grub 8 and MT USA.
Waterstone's Irish bestsellers at Christmas included cookery books Nigella Express by Nigella Lawson and Food for Living by Rachel Allen. Booker prize-winning novel The Gathering by Anne Enright also performed well, as did biographies of rugby star Trevor Brennan and Gaelic football manager Mick O'Dwyer.
