There was no new Harry Potter book this year to summon up book sales but that other sorcerer, Magic Circle member and HMV boss Simon Fox, still managed to conjure an impressive performance at group level.

When Fox took up his post in 2006, critics were already writing off his chances. The store group was portrayed as being as outdated as The Troggs rather than a retail equivalent of Duffy for the digital age.

But HMV is confounding not just the doomsayers but the downturn, as last week’s interim statement showed.

The Waterstone’s book chain was held back not just by the boy wizard’s absence, but a dull non-fiction release schedule. The chain’s like-for-like fall of 1.7 per cent, excluding the Potter effect, was hardly welcome news but in the circumstances not bad at all. And the 4.3 per cent uplift at the eponymous chain was a chart-topping performance.

Since Fox’s arrival, HMV has done a good job of co-opting trends that were once seen as threats and turning them into an opportunity. HMV has shifted its position to reflect changing customer habits in entertainment. In music, it will launch an MP3 download and streaming service later this month. And from modest beginnings the retailer established a gaming and technology business for which sales increased 50 per cent in the period. While music will always be important to HMV, the day when games become a bigger element in the mix than music may come in less than 18 months.

At Waterstone’s, the retailer has embraced new technology early rather than late, becoming exclusive partner for the Sony e-book reader launch last week. It might be a way off yet, but when shoppers in large numbers want to download Harry Potter rather than stick a first edition on their bookshelf, the chain will be there to cater for them.

HMV has not been completely reinvented yet. It will always be in hock to some degree on the strength of the entertainment release schedule, whether books or music (this Christmas the line-up looks good, incidentally). And its success in games is partly reflective of that market’s boom, which of course can change.

But as retailers battle the downturn, how encouraging that a business seen just a few years ago as one of the industry’s weaklings has not only recaptured its sense of confidence but may emerge as one of the winners in the tough 18 months to come.

George MacDonald is deputy editor of Retail Week.
Watch George MacDonald and Charlotte Hardie discuss the week’s retail news in TGi Friday