HMV reported an 11.6% slump in like-for-likes in the 20 weeks to September 15 today attributed to a slow sumer release schedule. The City reacted negatively to the news.

“The mix shift towards portable digital technology continues, driven by the store refit programme, and its core business of music, vision and gaming was impacted by a very quiet new release schedule. Management has commented that the exit rate was better than the average for the period and that there is a strong pipeline for the remainder of the year. We see no reason to change our sell recommendation and continue to believe there will be no let-up in the structural pressures on the business from on-line or the supermarkets. We see HMV as a value trap with potentially insurmountable structural issues.” – Kate Calvert, Seymour Pierce

“We have the shares as a Hold, because the upside and the downside appear to be roughly equal. Clearly, a deterioration in trade would leave the equity value of £13m out of an EV of £179m looking vulnerable.” – Philip Dorgan, Panmure Gordon

“Today’s surprise trading update is typical HMV – the figures are bad, but HMV clutch at straws and hope for a better Christmas. HMV admit that the inexorable downtrend in like-for-like sales continues, off by 11.6% over the last 20 weeks, despite store revamps and the new Technology drive, but the hapless new chief executive Trevor Moore points to the fact that the downtrend was ‘less marked towards the end of the period’, after a quiet time for new releases during the Olympics and that there is “a strong pipeline of new releases in the music, DVD and games markets ahead of Christmas”.

“The problem is that HMV always come out with this guff about ‘promising new Xmas releases’, which simply end up being bought for zero-profit by customers at the supermarkets.” – Nick Bubb, Independent Retail Analyst

“These results highlight a further deterioration in HMV’s performance and reflect the mammoth task facing Trevor Moore in turning around a retailer whose outlook seems bleak to say the least. Fundamentally, HMV’s key markets are in terminal decline and its position as last man standing on the high street in music and video inevitably means that there are very few retailers which it can take share off to counter this.

“There are very few obvious bright spots on the horizon for HMV. Perhaps most pertinently, while it clearly has the backing of its suppliers, its disposal of Waterstones and the Hammersmith Apollo, leaves it with few avenues to raise further cash in the future. The fact remains that HMV’s proposition is becoming increasingly irrelevant in the modern retail landscape. While it is being proactive in its attempts to evolve its offer through a greater focus on technology, this does not constitute a persuasive encouraging long term plan for survival.” - Joseph Robinson, Conlumino

HMV’s latest trading update leaves little to be positive about. A push into personal electronics doesn’t look likely to offset declines in its core music and video markets, and it appears to be struggling to sell its remaining HMV Live assets. While the retailer places some of the blame on a summer lacking major releases, it was actually up against particularly poor like-for-like comparables. New chief executive, Trevor Moore, may have a background in steadying a struggling technology retailer, however HMV faces a much bigger problem – the music and video market is in the midst of a transition to online purchases, both physical and digital, with little room for high street specialist retailers.” Matthew Rubin, Verdict