Profits plummet for music and video retailer Hastings
Multimedia retailer Hastings Entertainment’s financial woes continued as fourth quarter and year-end profits dropped, according to BusinessWeek
The Amarillo, Texas-based company reported fourth quarter net income fell 27 percent to $5.1 million. Net income fell for the third year in a row, down 12 percent to $5 million in 2006.
"We are disappointed with our results for the fourth quarter," Chief Executive Officer John Marmaduke said in a statement. "This holiday season was highly promotional, but I feel that our sales and merchandise margin shortfall, compared to our internal projections, are a result of specific merchandising initiatives, which occurred in the fourth quarter and are not indicative of our ability to produce increased earnings growth."
Hastings Entertainment is a multimedia entertainment retailer that sells new and used CDs, books, DVDs and video games. It also rents DVDs and videos.
The company operates 154 retail outlets in medium-sized markets throughout the United States. Hastings also operates an
e-commerce Web site.
shaky performances will precipitate changes in the executive offices.
“We are focused specifically on improving our merchandising and buying functions in fiscal 2007 through, among other things, realignment of senior management in these areas,” Marmaduke said.
Feeling the crunch from music delivery alternatives, Hastings’ music business has been hard hit. Music sales decreased 6.3 percent in 2007 after falling 2.4 percent in 2006.
Other departments fared better. DVD sales increased 11.7 percent, video games improved 3.4 percent and sidelines, such as novelty items, improved 7.5 percent. Books remained flat for the year.
According to The List database, Hastings doesn’t work with any outside agencies. The company spends about $3.1 million per year on advertising, according to Nielsen Monitor-Plus.
Watch Hastings carefully as executive upheaval may well include new agency relationships. A firm with strategic capabilities could help reposition the company as the music selling business continues to shift. Interactive firms should take a look at the company’s Web site and add some spark with blogging and downloads. Propose store rebranding to update the look and create an exciting and updated shopping experience that includes instore download stations.
Hastings Entertainment Inc.
3601 Plains Boulevard
Amarillo, TX 79102
Vice President of Marketing
Chairman, President & Chief Executive Officer