LONDON (CelebrityAccess MediaWire) — At their recent Annual General Meeting (AGM) on March 29th, representatives from troubled Sanctuary Group announced their strategy for trying to regain profitability.
The keystone of their strategy is that Sanctuary will operate as three autonomous divisions: Recorded Product, Merchandising and Artist Services. Each division will focus on its own profit and cash generation.
"In response to the significant changes currently underway in the US music market, to which our US operations have not been immune, the Board has approved a proposal to restructure the Recorded Product division’s US operations. The US division will now concentrate on growing its higher margin digital and licensing businesses and continue to exploit out catalogue rights. The net financial cost of the restructuring is not expected to be material in the current fiscal year." the report stated.
If this will be effective long-term is difficult to say. The three divisions will still necessarily be integrated and reliant upon one another and with current trends in the music world, it will be a significant challenge to re-organize effectively.
The strategic repositioning will take some time to implement. The report added "We confirm that we are making good progress with our programme of strategic disposals. As we have previously stated, it will be 2008 or later before there is a return to overall profitability." – CelebrityAccess Staff Writers