HMV burst through the high street gloom yesterday with the best like-for-like sales figures since it floated on the stock market six years ago.
The group's shares surged 9 per cent at one stage as HMV chief executive Simon Fox, who has masterminded the turnaround at the previously struggling music and books group, revealed like-for-like sales had jumped 9.4 per cent in the five weeks to 5 Ja
nuary.
The company, which owns the Waterstone's book chain, said it believed full-year pre-tax profits would be at the top end of City expectations. HMV's shares closed up 4 per cent or 4p at 105p.
Asked if he would describe HMV as a "winner" on the high street over Christmas after so many other retailers struggled, Fox said: "Yes, I think we would."
The group, which had previously been hit by consumers downloading music from the internet, was boosted by strong demand for DVDs, games, cookery books, and albums by Leona Lewis and Amy Winehouse.
Fox said the performance proved the company had made the right repositioning decisions.
Broker Panmure cheered what it called "probably the best Christmas trading statement we'll see this year".
Panmure said: "The instore proposition has clearly paid off, but it remains to be seen whether the chain can build further on this strong like-for-like performance."
HMV announced a three-year turnaround plan in March last year, introducing "interactive" HMV stores and promoting online sales aimed at tackling competition from supermarkets and internet-only retailers.
In its first Christmas under the revamp, HMV UK & Ireland reported like-for-like growth of 14.1 per cent, while Waterstone's saw growth of 4 per cent.
Fox said: "Less than a year into our transformation programme the initiatives we are undertaking to revitalise our business have helped to deliver a highly successful Christmas."
He added that the business had now been stabilised, and the next step was to develop new channels to markets while maintaining profit margins and cutting costs.
On music, the chief executive said: "I think we're the only people taking music seriously.
"I'm clearly aware of what others are reporting (but] right now we're not seeing it. All I can say is we think we're in good shape to withstand whatever comes our way."
Gross margins were maintained at HMV UK & Ireland, despite a higher mix of games, and they were up 30 basis points at Waterstone's, despite a highly competitive book market.
The consensus City pre-tax profit for the year to end-April 2008 is £48 million, with a range from £43m to £53m.
RAY OF SUN AS RETAILERS WEATHER TOUGH TRADINGA HANDFUL of big high street names said they were coping with tough trading conditions, helping to revive investor interest in a sector which has been hammered by fears over a downturn in consumer spending.
Home Retail Group, which owns the Argos and Homebase chains, said it expected full-year profits towards the top end of analysts' forecasts.
Kesa Electricals, owner of the Comet chain, also helped ease concerns after a recent profit warning from rival DSG International.
Meanwhile, Primark, the discount clothing chain owned by Associated British Foods, said it had a stronger than expected Christmas.
Kesa chief executive Jean-Noel Labroue warned against excessive pessimism and said major store groups could cope.
He said: "It is true that customer confidence is declining … but I don't anticipate such a big disaster as you may read from some observers."
Analysts said companies that run online operations to complement their stores were enjoying strong sales growth – stronger than many pure internet retailers.
