The news makes HMV the latest in a succession of retailers to fall into trouble following a difficult trading period and the challenge from online stores.
Dan Wagner, CEO and Chairman of mPowa and Powa Technologies, which is responsible for implementing online and mobile retail platforms for some of the leading high street names, warned that many other retailers could fail as a result of deploying a similar approach to the ever-changing digital reality:
"Although HMV has introduced various promotions to drive sales, the shift in the way consumers are buying goods has had far-reaching implications. Internet shopping is now more popular in the UK than any other country in the world, with UK spending an average of £1,083 a year on shopping online. While this is good news for British ecommerce businesses, those that didn’t have a digitally focused strategy from the outset are now playing catch-up and the consequences are clear to see.
"Although HMV responded to its changing customer demands by moving towards a technology focused strategy with the sale of headphones and tablets, it appears by today’s announcement that this strategy has not been able to compensate for the fall in CD and DVD revenue. Competition from iTunes and Amazon seems to have contributed to the fall in sales for HMV.”
Wagner Concludes, "Many more retailers could succumb to a similar fate because of the cumulative effect of poor sales throughout the year. Retailers have to stay ahead of the game and have an effective online and offline strategy in place if they are to survive in this new technology-focused era.”
Elsewhere, IG Group Interim Results see revenues fall
IG Group Holdings plc (LON:IGG) saw net trading revenue down 14% at GBP168.9m with PBT 21% lower at GBP81.1m. The dividend is maintained at 5.75p a share.
It added that market conditions have been challenging with low market volatility and fragile consumer sentiment and since the year end, aside from the Christmas and New Year period, it has seen similar conditions. If the latter persist, revenue for H2 is likely to be in line with H1, but noted that it remains confident in its long term growth prospects.
Burberry reports strong Q3 trade
Burberry Q3 Trading Update & IMS reports that in the 3 months to end December 2012, total revenue rose 9% on an underlying basis to GBP613m with underlying retail revenue ahead 13% at GBP464m. Comparable store sales increased 6% but wholesale underlying revenue was 5% lower.
In H2 the latter is now expected to be down by a low to mid single-digit percentage year-on-year. Growth in the US, Asia Travel Retail and Emerging Markets more than offset by a weaker Europe. It added that it expects the external global environment to remain challenging but sees continued opportunities.