Entertainment retailer HMV boss Simon Fox has insisted there is room on the high street for a specialist book store despite its Waterstone’s chain revealing declining sales and its rival Borders UK looking set to be wound down.

Waterstone’s like-for-likes declined 5.1% in the 26 weeks to October 24 while total sales dropped 4.3%.

Fox said the “highly competitive book market remains difficult” but added: “There’s absolutely room for a high street specialist book store.

“We’ll have to continue to modify the Waterstone’s offer; we’re not satisfied with how things are.”

Fox admitted Waterstone’s may suffer from “short-term disruption” resulting from Borders’ closing down Sales over Christmas, but said “the potential withdrawal of a competitor may be of benefit to Waterstone’s” in the medium to long term.

HMV Group made a first-half pre-tax loss of £24.9m, compared with £27.5m last year. The group makes all its profit in the second half.

Group like-for-like sales dipped 2.1% in the period and total sales climbed 5.6% to £797m.

At HMV UK and Ireland like-for-likes rose 1.6%, with total sales up 12.8%. Fox claimed HMV made “significant market share gains”, particularly in music and video.

Last Christmas was HMV’s biggest year to date, and Fox expects this year will bring in more revenue as the retailer is lifted by X-Factor-related products and more stores trading.

Last week the group said it was “considering its position” regarding a possible bid for its live music joint venture partner Mama Group. HMV has been looking outside of its core retailing business in recent years to increase its revenue streams. 

This week HMV revealed it is making a move into music festivals with Mama Group, launching an annual event called Next Big Thing.

HMV added that its 10 pop-up shops are performing “better than expected”, and Fox said the retailer would look at keeping “at least half” of them open on a permanent basis.