HMV group HR director Steve West has hit back at press reports that morale is bad in the business following the announcement last week that the high street entertainment giant was to close a store on London's Oxford Street.

West said that morale among both HMV and Waterstone’s employees in the run up to the crucial Christmas period was "good".

"These are not new challenges for HMV and our 5,000 people are used to dealing with these challenges. They are now fully focused on Christmas and doing the thing that HMV people always do – going about it 100%.

"I can’t deny that business is tough but at the moment staff morale is good," he said.

HMW last week announced it was closing its 35,000 square feet store opposite London’s Bond Street after selling the leasehold to US fashion retailer Forever 21 for £13.75 million. West said the business felt this was an opportunity it could not turn down and that most of the store employees would be relocated in other stores.

He added that both HMV and Waterstone’s had hard targets to hit for Christmas but that there was great determination.

Like-for-like sales at the group fell nearly 15% in the 19 weeks to 4 September and there have been constant rumours that Waterstone’s founder Tim Waterstone would make a bid to buy back the eponymous book chain.

West admitted Waterstone’s, the UK’s largest book retailer, had been through a difficult couple of years but said that managing director Dominic Myers had done an "outstanding job" in fixing the mistakes and putting the chain on a positive foot for Christmas.