(taken from Music Week portal)

By Ben Cardew

HMV Group is to close up to 60 of its HMV and Waterstone’s stores during the next 12 months, after reporting poor results over Christmas.

The retailer today announced a 14.1% drop in like-for-like sales at its UK and Ireland stores for the 10 weeks to January 1 2011, blaming the bad weather and weak sales of entertainment products.

Looking ahead, the retailer says it is expecting a tough time in 2011 and is therefore taking aggressive action to manage its cost base, including closing 60 UK stores. These will be across HMV and book retailer Waterstone’s and are likely to occur in cities where the retailer has several outlets. Overall, around 40 music outlets are set to close.

HMV CEO Simon Fox says HMV remains “a profitable and cash-generative business and a powerful entertainment brand” despite the challenging year.

“The pace of change in the markets in which we operate underlines the urgency with which we must continue to transform this business,” he adds.

And he promises the music industry that the impact on CD sales should be minimum, with a focus on consolidating sales.

“My message to the music industry would be, I appreciate your support,” he tells Music Week. “We needed to take steps to make sure we are a profitable, long-term business. We think the sales impact [of these closures] will be minimised by our actions.”

HMV currently operates more than 300 high street stores throughout the UK and Ireland, with 300 Waterstone’s outlets.

Recent years have seen the company defy the high street gloom by opening additional stores, as well as buying the Fopp brand. It has also branched out into new areas such as live music and cinema.

However, on December 9, HMV announced pre-tax losses of £41.3 million in the six months to October 23.