HMV chief executive to step down after disappointing Christmas sales
LONDON – The chief executive of music and books retailer HMV announced Thursday he is stepping down as the company reported disappointing Christmas sales and sharply lower half-year results. The company’s shares plunged after the news.Alan Giles, 51, who has been chief executive since 1998, said he will retire in December. No successor was named.The company reported a 5.5 percent drop in sales at its British stores in the five weeks to Jan. 7, compared with the same period last year. Sales at its Waterstone’s bookstores were down 2.4 percent over the same period.HMV said it fared better in Canada – where sales rose 6.9 percent – and the Asia-Pacific region – up 4.6 percent – but Christmas sales for the whole company still fell by 2.7 percent compared with last year.Shares in HMV dropped 9.4 percent to close at 178.50 pence ($3.15) on the London Stock Exchange.”The competitive pressures faced by our U.K. businesses made trading very difficult during the autumn period,” Giles said, citing competition from supermarkets and the Internet. “Despite the improving trend at Christmas, the group retains a cautious view of the outlook, and we remain very focused on maintaining tight control of our costs and on maximizing our performance over the remainder of the year.”HMV earns about 90 percent of its profits in the second half of its financial year, which includes the key Christmas period.In results for the six months to Oct. 29, also released Thursday, HMV said net profit for the period was just 100,000 pounds ($180,000), compared with 7.2 million pounds the previous year.But growth from new stores ensured that total revenues were only 500,000 pounds ($900,000) less at 759.7 million pounds ($1.35 billion).Operating profit slumped to 2.8 million pounds ($5 million) from 15.7 million pounds a year earlier.Giles’s decision likely will cast doubt over HMV’s controversial plans for a takeover of the smaller independent bookstore chain Ottakar’s. The deal, which is opposed by publishers and authors, has been referred to competition authorities.HMV also said former IBM U.K. Chairman and Chief Executive Carl Symon will succeed David Kappler as chairman from Feb. 1.