HELLO,

MY HEART SAYS BUY, MY HEAD SAYS NO!

ANY THOUGHTS?

DEAD DOG OR NOT?

It was lately acting like a dog, but today is bouncing well up from 28p to 31p, time to look closer, for a short term bounce
All the Indicators are on the rise from oversold

The HMV sale is now on!
27p now.

Sales slipping at HMV

Music and books retailer HMV Group said today that for the five-week Christmas period total like-for-like sales were down 12.9%, with Waterstones down 0.4%.

As reported in the group's Interim Results on 9th December 2010, the beginning of the peak trading period was significantly undermined by severe weather in the UK, which continued through until Christmas.

In addition, in HMV UK & Ireland, notwithstanding strong sales of certain key products, underlying entertainment markets have remained weak in the financial year to date. Consequently, the anticipated improvement to first half like for like sales did not materialise.

HMV said at bookseller Waterstone's improved like for like sales reflects the success of the turnaround actions implemented during 2010 and improved stock availabilities from the book hub.

HMV said the challenging entertainment markets, combined with the severe weather over our peak trading period have had a negative impact on the trading year to date.

The group is taking aggressive action to tightly manage its cost base and expects to exit around 60 stores across our UK businesses over the next 12 months as it seek to re-shape its store portfolio. A further 10m per annum of cost savings has been identified across the group.

HMV stated that the combination of more challenging trading conditions, off-set to an extent by a significant step-up in cost savings, leads it to expect, with four months of the year to go, that profit before tax and exceptional items for the full financial year will be around the lower end of the current range of market expectations.

Given the difficult trading conditions over Christmas and the likely outturn for the year, the Board now expects that compliance with the April covenant test under the Group's bank facility will be tight and is taking further mitigating actions during the next four months to address this.

CEO, Simon Fox, said: "Whilst HMV has had a challenging year to date, it remains a profitable and cash-generative business and a powerful entertainment brand. The pace of change in the markets in which we operate underlines the urgency with which we must continue to transform this business.

"Progress at Waterstone's this year has been pleasing, and we remain on track to meet our business and financial objectives for the end of the first year of our turnaround programme." Story provided by StockMarketWire.com

Get out now

and buy back at 12/14p.

The Sales fall Xmas2010 is not much IMHO, - there was snow and many folks ordering on-line - or elsewhere for Flat-TV's, game consols, etc. The sp "anticipated it" the Ann. and sp drop is MM's making sure they don't get lumbered with too much stock....
Music (& Books) have largely become unexciting -

Is this a bit like Woolworths..? With the difference being that HMV has external reasons to be fearful their business is tending lower year-on-year, whereas Woolworth was losing business because the Directors didn't care (and had no business nous between them). Perhaps they both sare the same style Directors...anyone...?
I fear HMV brand (dog) is soon their only asset, but no-one plays records anymore.

Mitzy is spot-on . . .. but with a large dose of "Wait and see" . . . IMHO.

hmmmm - further fall tomorrow - or slight bounce?? they still turn a profit but not keen on the bank facility situation in april - hmv need to modernise quick or be consigned to history over a period of time imo

good streamlining steps though which may suggest a little bounce tomorrow perhaps? we will see - nearly bought today but left it - glad i didnt buy

surely a dead duck but insufficient to go for to short

Credit insurers have added to the woes of HMV, the struggling entertainment and book retailer, by scaling back cover for some of its suppliers. Two music and entertainment companies have said they can no longer get credit insurance to supply products to the retailer, which issued a profits warning this month after dreadful Christmas trading, the Independent reports.

Not good.

oh dear - they always say that when credit insurance falters - this is bad despite the rns - glad i am not in here yet - been watching though - needs to cheapen much more - probably wont bother now - i just cant think of much hmv has going for it apart from the dog!!! gla

Sky news says they could do a Woolworths.

they might not survive 2011 unquote.

Sky News article

mitzy - yep been thinking the same - would not surprise me if this did a woolies

jrm - i wouldnt advise anyone in case i messed up - but personally at the moment its a no for me - last i knew the banking situation is dire and needs to be sorted by april - i dont think that has changed - if it has pls update me

hmv imo kind of got stuck in time and didnt innovate enough - hence they are where they are - if i was an employee i would 1/ be worried 2/ look for alternative employment - poor souls - saw it at woolies, connaught and elsewhere

gibby watching the Sky report this week they really put the boot in saying in effect they are worthless I have never seen such a biased report.

The reporter said he believed they would not be around in 2012.

whoops! i know - this is interesting....

HMV May Need to Sell Waterstone's or Offer Shares to Buy Time

By David Altaner - Jan 21, 2011 11:12 AM GMT

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HMV Group Plc, the U.K.s biggest music and DVD retailer, may need to sell its Waterstones bookstore chain, suspend its dividend or offer shares as time runs short to develop a business model for the digital age.

The retailer probably needs five years to shift its business away from CDs and DVDs and become a web- and mobile phone-based destination, said Mark Mulligan, an analyst at Forrester Research. With a banking covenant test due in April and suppliers having credit insurance reduced, it may need to buy time to implement such a strategy.

Selling the 311-store Waterstones chain might fetch as much as 75 million pounds ($119 million), according to Nick Bubb at Arden Partners. Eliminating the dividend would save about 31 million pounds for the Maidenhead, England-based retailer, which is diversifying into live music venues to boost sales as competition increases from supermarkets and online retailers.

It would let them clear the decks to play another day, said Bubb, who rates the shares neutral. The danger is, they dont sell Waterstones, and die a death of 1,000 cuts.

HMVs shares have fallen every year since 2005, plunging 66 percent in 2010, and trade at a price-to-earnings ratio of less than three. The stock fell as much as 3.25 pence, or 14 percent, to 20.25 pence in London trading today, the lowest since a 2002 initial public offering. HMVs market value of 91 million pounds is a fraction of the 845 million pounds that Permira Advisers Ltd. offered for the company in 2006.

HMV said this month that profit would be at the lower end of analyst estimates and the covenant test would be tight. The retailer also said it will close 60 U.K. outlets in 2011 after reporting a 14 percent decline in same-store sales at U.K. and Irish HMV stores in the 10 weeks ended Jan. 1.

gibby I may buy around 12p but realistically they are looking doomed.

they are in serious trouble - so many things might happen - but i would say they should continue in reverse at least to 15 - 17p minimum thanks to the likely breach of bankin covenants - i think the analyst estimate of 'tight' for the covnant test is generous imo - personally i have not been into an hmv for years - how many others - hmv will imo probably be sold, or exist as an almost completely different entity once they have torn up their old road map which was clearly useless - hmv shares fallen every year since 2005! even if the weather was better around xmas i honestly dont think it would have made much difference to hmv's troubles

12p - yep - if you do keep a very close eye on them more than usual - once waterstones flogged if they go that route is a big hole in their asset sheet - still following this one but should continue in reverse for now - with usual day trading etc glad i kept clear here again today - but never say never! he who dares & all that - have a good weekend

i can see absolutely no reason to buy hmv, for their problems are surely exacerbated by the continuing poor performanc of the high street in general ..... is there enough "meat" to make hmv worth shorting? ..... possibly though it's not quite so clear cut as it was with CNT

Have to agree, with intense competition and austerity measures kicking in it is difficult to see a way out for HMV. One to keep clear of imho.

Observer.