HMV looks to festival of music for growth

The Waterstone's owner is looking to diversify its traditional businesses as it positions itself to weather changes on the high street and in the music industry.

HMV hopes new products such as entertainment-related fashion will rise from 9 per cent of sales to 21 per cent by 2013 under the plans.

The company has also moved into live music with the takeover of the MAMA Group earlier this year, leaving it with 11 music venues and an interest in events such as London's Lovebox festival.

It now plans to add two to three new venues a year, while it has also launched events for this year like the Next Big Thing festival at MAMA venues and the High Voltage rock festival.

HMV said the plan reflects the changes in the music industry, with the live performance market expected to be around a third larger than recorded music by 2012.

At Waterstone's – which has struggled amid the recession and poor sales of usually lucrative big name autobiographies – the group aims to increase non-book sales from 6 per cent to 10 per cent in the next three years.

The plan will see more stationery and gifts on the bookseller's shelves as it looks to capitalise on its position as "the last remaining specialist bookseller on the high street".

The book chain saw its like-for-like sales slump 8.5 per cent in the five weeks to January 2.