Struggling high street music retailer HMV has reported a 11.6% sales slump in like-for-like sales.
In its interim report, released on Friday, HMV said despite its poor sales it managed to increase its share of the core high street music, film and computer game sectors over the period, but that there continued to be a "significant" fall in the value of those markets.
A slow release schedule for new albums, films and games was also to blame for low volumes, but the retailer made much out of its increased sales of MP3 players, earphones and other accessories.
Trevor Moore, chief executive of HMV, said in a statement: "The like-for-like decline was less marked towards the end of the period and we should be helped in the remainder of the year by a strong pipeline of new releases in the music, DVD and games markets ahead of Christmas."
It also boldly claimed it would be back in profit by the end of the financial year; a pledge some analysts found difficult to swallow.
"These are truly dreadful results," Mintel's retail director Richard Perks told the Huffington Post UK. "Last year the business made an operating profit of £1.8m; If the current rate of decline continues then with unchanged costs you'd be looking at an operating loss of over £30m.
"There would certainly be some cost cutting through the year - but how much? My own feeling is that I can't see how the business could be profitable this year on a sales decline like that."
Perks added the challenge HMV faced was how it would survive in an era where people increasingly download music, rather than paying for CDs.
"The problem for HMV is its stake in online is very small - and it is held by others. HMV is trying to improve its hardware offer, but I'm not convinced that it has done enough."
Perks concluded that if he was pushed to say whether he thought HMV would succeed in being profitable by the next fiscal year, he would "opt for failure".
Lauren Charnley, a stockbroker for Redmayne Bentley, was also cynical about whether the Christmas sales rush would be enough for HMV.
"The retailer has a lot of catching up to do after posting a 14.8% drop in group sales for the first half," she said. "This is likely to improve over the winter months; however the group has a long way to go to make up this heavy decline and return to profit.
"Store closures and disposals should aid the group in its plight for profit, but the Christmas period was disappointing for retailers a year ago and the UK economy remains a challenging environment, particularly for this sector and HMV."
And Louis Coke, senior investment manager at stockbroker Charles Stanley was similarly unconvinced.
"There are some upsides, including the successful sale of the Hammersmith Apollo and a pipeline of new media releases in the run up to Christmas, (but) I am still far from optimistic that a good festive trading period will be enough to restore the company’s fortunes entirely," he told Huff Post UK.
"We have to bear in mind that consumers have seen virtually zero wage growth over the last few years, inflation is eating away at their purchasing power, and many have been paying down debt.
"All this means they are becoming more and more sensitive to price. I wish the management every success in their efforts to turn the business around, and I do believe it is achievable, but at what cost to shareholders remains to be seen."Suggest a correction