The news came as the group reported a further decline in sales and warned of a sharp fall in profits for the year just ended.
Alan Giles, chief executive, said the group expected profits for the year to April 29 to tumble to about £98m before tax and exceptional items. This is in line with analysts' current expectations, which range from £93m to £103m but is significantly below the previous year's figure of £129.3m. Mr Giles said he expected the figure to come out in the middle of the analysts' range.
Like-for-like sales at HMV remain in double-digit decline, falling by 11.4% over the 16 weeks to April 29. This leaves their fall for the full year at 10.8% and comes despite a strong performance from computer games, suggesting that sales of music and DVDs have been even worse.
At Waterstone's - where the founder, Tim Waterstone, dropped a brief £280m bid attempt last week - underlying sales fell 5.6% in the 16-week period, putting the decline for the full year at 5.8%.
Mr Giles said the difficult sales trends experienced earlier in the year had persisted. "The challenges we are dealing with were never open to a quick fix," he said but added that early results from the group's new pricing and promotional policy, on trial at six stores, had been "encouraging".
HMV has admitted that it badly underestimated the impact the burgeoning internet would have on its business but is now belatedly getting its online act together. "The Amazon partnership has been good but when we first entered into it we felt that online sales would not get to more than 10% of the UK books market. But now it's too important to leave to somebody else," Mr Giles said.
The chief executive is due to step down from the group at the end of this year and said yesterday that "good progress" is being made in the search for his successor.
On Ottakar's, he said HMV has not yet decided whether to launch a new offer for the specialist books chain when it receives final clearance from the Competition Commission.
This is due by May 22 but could come later this week and is expected to start a bid battle with its rival WH Smith, which is also interested.
Deteriorating trading at Ottakar's means HMV is unlikely to want to pay anything near its original £96.4m offer, although, if WH Smith enters the fray, the price could be forced back up. HMV said that once the Ottakar's situation was clarified, it would review its capital structure. This could lead to a return of cash to shareholders.
From The Guardian