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HMV says £6m refit proves commitment to music

HMV says £6m refit proves commitment to music

Chief executive Simon Fox revealed today that the group would refit 150 stores by the end of September, increasing the selling space for tech products such as MP3 players from 8% to 25%.

This has led some commentators to suggest that HMV is moving away from CD and DVD. But Fox said this is emphatically not the case. "It is not about cutting back on range but about cutting back on space," he told Music Week.

"What we need to do to drive the business forward is to offer a better range of products to our consumers."

Fox explained that the move to selling tech products will not mean HMV selling products such as digital cameras with no relation to its entertainment retail core. Instead, it would stick to products such as MP3 players and headphones that have a link with music and film.

And he explained that HMV had already demonstrated it could pull off this balancing act in six trial stores in locations including Guildford.

In order to do this, however, HMV will need to change how it sells music and DVD. This will mean titles appearing in one space, rather than in several different locations, such as the chart wall and the gondolas.

"It is largely around changes to uniting and merchandising without compromising on range," Fox explained. "We are very, very concerned to make sure that we get our stores as active as possible for music."

This will mean more listening posts as well as new spaces for music, including a new music section and a heritage section.

"We are looking to be innovative with the way we select and display music," Fox said. "We want to bring certain gems to life in a way they aren't at the moment.

Fox was speaking to Music Week after HMV announced a large fall in profits for its financial year: the company revealed this morning it had made a pro-forma profit before tax and exceptional items (treating Waterstone's and HMV Canada as continuing operations throughout the financial year) of £28.9m for the 53 weeks to April 30, down from £74.2m in 2010.

Fox said that the results were "no surprise but obviously very disappointing". "We have been through a very difficult six months, restructuring the group in context of what has been a difficult year," he said, referring to sales of HMV Canada and Waterstone's, as well as plans to close 40 HMV stores.

But he concluded on the positive note of the company's £220m bank refinancing, which alleviated some of HMV's immediate financial pressure.

"We have got the resources now to develop this year," Fox said. "And we have got to put the past behind us."

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