British music, books and games retailer HMV posted a 1.8 per cent fall in underlying sales for the first 18 weeks of its financial year and announced a deal to boost its digital business.
The firm, which runs music, DVD and video games shops under its own name as well as Waterstone's bookstores, said today it was buying a 50 per cent stake in digital media firm 7digital for £7.7 million in cash.
Sales at stores open at least a year fell 1.8 per cent in the 18 weeks to August 29th, spanning the first and the start of the second quarters of HMV's financial year.
Like-for-like sales in the UK and Ireland were up 1.7 per cent as it grabbed market share from the collapse of rivals Woolworths and Zavvi around the end of last year.
This was offset by a 12.6 per cent drop in underlying sales in international markets and by a 3.4 per cent decline at Waterstone's on the same basis.
"In a tough consumer environment, the group has made a solid start to the new financial year," chief executive Simon Fox said.
HMV, which faces the same competition from supermarkets, online retailers and digital downloading that led to the demise of Woolworths and Zavvi, has responded by cutting costs and widening its focus.
It has entered the live music and ticketing markets, is trialling digital cinemas in partnership with Curzon and selling mobile phones in a deal with France Telecom's Orange.
The firm said today its deal with 7digital would give it access to industry-leading technology, a catalogue of over 6 million digital music tracks and would also strengthen its position in the market for digital books.
Reuters