In an exclusive interview with HR, West said the recent decision to close 60 stores was a sign the retailer was still committed to becoming an entertainment hub, where customers gain the widest access to music and entertainment content in the ways they want to – via the high street, online, digitally or 'live'. A bellwether for the wider entertainment sector, HMV owns Waterstone's, Fopp and a ticketing, venues and festivals business, as well as the music chain.
"In cutting back on sites that no longer make the return we need, we can better support our more profitable and successful stores as we continue our transformation into a broad-based entertainment brand," said West.
"It's a bit like pruning some branches to support future growth of the whole tree, although that will be little consolation to some colleagues, so this is not something we have undertaken lightly."
Store closures were something every retailer does as part of its day-to-day activities, West said, but HMV had "probably been more transparent than most" in laying out its plans for the future, even "at the cost of attracting what has been an over-the-top reaction from parts of the media".
West said no final decision had yet been taken but both affected and non-affected stores would be advised. With many stores located close to others, the group hoped to redeploy as many staff as possible, West added.
"Ultimately, we're just talking about 10% of our estate. Any move will still leave the majority of our 200-plus stores in place, so that we can maintain and invest in our specialist offer in response to viable local and regional demand."
HMV is looking at how its HQ offices can best support its stores. All departments, including HR, will be part of this review.
Group chief executive Simon Fox is running a cost-reduction programme ahead of a covenant test by the firm's banks in April, which he admitted would be "tight". HMV, which expects to deliver pre-tax profit at the lower end of expectations for the year to April 2011, remains a cash- generative business, Fox said.
FIGURE IT OUT60 - The number of HMV Group stores facing closure in the next 12 months
£10m - Further cost savings per year identified by the group
£46m - Lowest market expectation for financial year ending April 2011
-9.1% - Total decline in sales for 10 weeks ending 1 January 2011 for whole HMV Group. Snow gets the blame
Source: HMV Interim Management Statement.
