HMV has warned that it faces an uncertain future in the face of continuing falling sales, as the retailer struggles to compete with online retailers and piracy.
The troubled music, films and games retailer said it faced a “probable” breach of its current banking agreements next month, and was facing “material uncertainties”.
During the six-month period, HMV said its like-for-like sales were 10.2% lower than a year earlier. Sales of its CDs and DVDs were down 16% compared with a year earlier, by the same measurement, which the company blamed on “weakness in the market”.
By contrast, sales of its games and technology products were 6% higher, again ona like-for-like basis.
HMV has now been struggling for a number of years, having been hit hard by the big growth in music and film downloads – legal and illegal – and by the rise in the sale of chart CDs and DVDs by the big supermarkets.
As a result, it has continued to cut costs, closing 60 of its shops in 2011.
Chief executive Trevor Moore said the company was continuing to “maintain regular and constructive discussions with the group’s banks”.
He added: “HMV has had a difficult first half. However, the business has started to deliver a number of new initiatives which will help to maximise the seasonal sales opportunity and provide a platform for growth in 2013.
“Additionally, as we trade through this period we will continue to develop further initiatives with our suppliers and I will provide updates at the appropriate time.”
However, Moore said: “Given that the current trading performance is not in line with expectations, the group is unlikely to achieve previous expectations for the full year.”