HMV edges closer to the abyss

Despite all the brave talk when new boss Trevor Moore joined the company a few months ago, things haven't got better for HMV. In fact, they've got quite a bit worse:

[T]he terms of its bank loans were not likely to be met in January and April, placing the future of the 238-strong chain under threat.

HMV said like-for-like sales fell 10.2% in the 26 weeks to 27 October as its pre-tax loss narrowed to £36.1m, compared with £50.1m the previous year. The dismal results come despite reports that HMV has received £40m in financial support from its suppliers in a bid to keep it going over the festive period.

HMV shares crashed more than 40% in early trading on Thursday morning, to just 2.375p, giving the retailer a market value of just £10m.

Last year, it got a lifeline from record labels who feared a world without a music store. Now that stores like Primark and BHS are offering a rack of top 40 CDs in most branches, you might wonder if that was the best use of (apparently) 40 million quid.

Fox breaks from HMV

A couple of years back, Simon Fox turned down the chance to run ITV to stick the course of turning round HMV. He's sticking the course no more, as he's stepping down.

"I am proud to be leaving HMV with a profitable future secured," Fox said.

The word "future" is rather important there - he's leaving as the company is expected to announce a sixteen million quid loss, so his legacy appears to be a profit for 2012-2013 of ten million he's promised.

As he's not going to be there, he could announce that he fully expects Nipper to be reanimated in the next financial year and claim that as a legacy.

Fox hasn't really been a resounding success - he's spent the last few months of his time at the company trying to offload the live business he spent much of his earlier time trying to build up; his other boffo ideas have pretty much run into the sand - remember when HMV was going to open a chain of teeny tiny cinemas in the space above its stores? And the doomed attempt to create youth-club style games areas? Ooh, and intention to take on the consumer electronics market by flogging headphones?

Worse, the stores would have vanished entirely if it wasn't for a deal with the labels to keep it afloat. It's true that Fox should take some credit for having done that deal, but it has to be balanced out by the severe lack of flexibility in dealing with its new music business partners when shaping the group for the future.

So, it's going to be a tricky task for the new head of the company. Surely HMV have looked high and low for a leader who has experience of turning round failing retailers?

Trevor Moore, the former chief executive of photography chain Jessops, has been appointed as Fox's replacement.

Well, that explains why Trevor Moore was headhunted away from Jessops last month.

To be fair, while hiring someone from a high street photo shop to take over a high street record shop might sound like replacing asthma with bronchitis, Moore hasn't had a totally bad time of it in Jessops - the chain has been selling more digital cameras in an overall declining market; under his time at the top the company has had a significant growth in online sales; and a fusty, failing confused business has been tidied up. Even if Jessops isn't quite a household name, it has remained a strong high street presence and that's something of victory.

But, the bottom line is his last full year still saw the chain make nearly a million quid loss. So he's turned things around, but without moving them forward. It'll be interesting to see if he can actually make HMV profitable.