Online growth helped HMV on its way to a bumper Christmas.

Bucking the current trend of gloom on the high street, HMV Group reported a record Christmas on Thursday – citing the popularity of DVDs, music and books, and online growth.

For the 10 weeks ending 5 January 2008, the owner of HMV music stores and Waterstone’s book shops, experienced a 9.9% increase in sales.

HMV total sales were up 16.1%, whilst at Waterstone’s revenues increased 0.5%. HMV International total sales, meanwhile, went up 2.3%.

The results will be a welcome boost to the retail giant which only last Christmas was in the midst of profit warnings and senior management departures.

Looking forward, the Group said it will continue to focus on its three-year turnaround plan “to protect and revitalise the core retail business, drive cost efficiencies and grow new revenue channels.” Gross margins for the year are expected to be in line with previous expectations.

Commenting on the latest results, HMV Group Chief Executive, Simon 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.

“Having stabilised the business, we will continue to focus on revitalising our store propositions as well as growing new channels to market and carefully managing margins and costs. The Group is, therefore, well positioned for the next phase of its turnaround.”

The retail giant confirmed that trials for its ‘Next Generation’ stores have “provided basis for roll out.” The new outlets feature innovative touches, including gaming corners, digital download areas and smoothie bars.

By Natasha Piscitelli