Financial News
- 16 January 2013, 11:23
HMV Collapse: Gift Cards And Vouchers Invalid
HMV has confirmed it will not be accepting gift cards or vouchers from customers as the retailer prepared to collapse into administration.
The company confirmed its intentions after a board meeting, as exclusively revealed by Sky's City Editor Mark Kleinman.
The chief executive of HMV - which employs 4,350 people - said it was "business as usual" at the chain's 238 stores, which will remain open while administrators Deloitte attempt to find a buyer.
Trevor Moore told Sky News he was "absolutely confident" about the future of the business, but added: "It does require a number of significant changes in the business, and those changes we're very clear about."
He said: "We would hope to find a prospective buyer that could work with us to enable me to deliver those changes and ensure that HMV - which is one of the consumer's 10 most favourite stores in the UK remains on the high streets that we operate in."
A company statement said it had ultimately failed to meet the conditions of its bank loans, and trading in HMV's ordinary shares had ceased.
It said the business "faced material uncertainties" and would probably "not comply with its banking covenants" at the end of January.
Confirming the appointment of administrators "with immediate effect", the statement added: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection."
Mr Moore urged staff at the chain to support each other despite being faced with an uncertain future.
"My message is that it's critically important - even more now than ever before - that we remain focussed on the job at hand," he said.
"That we engage with our customers, we look after each other, support each other, and engage ... to ensure the business continues to trade successfully."
He added: "As far as I'm concerned, right now it's business as usual - HMV's doors are wide open, we have stock to sell, we have teams to staff our stores and we have a business to run."
Celebrities have been among those sharing their memories of the iconic chain.
BBC 6Music DJ Lauren Laverne tweeted: "Long time since i was in #HMV, but I remember it well? RIP."
Also on Twitter, rapper Professor Green posted: "hmv bankrupt. we may as well just give up on any medium that involves hard copy and get on with it. #sadtimes."
And fellow artist Sway added: "Just a thought. If all of the artists and labels in the UK all made a small donation do you think it would be enough to save #HMV?"
Retail expert Mary Portas posted: "HMV was a brilliant business that was a great part of our Highstreets. So sad to see this one go."
The retailer, which has struggled for several years in the face of online competition, had announced last week an additional sale at its stores in a last ditch effort to raise cash but its £176.1m debt pile was too great for the move to have much impact.
Last year, the company sold off its most profitable arm, its live music business, as it attempted to slash what it owed.
In January 2011, suppliers including Universal Music came to HMV's rescue with a deal that helped the retailer shed some of its debt, but they are understood to have dismissed requests for more financial help earlier this month.
Analysts suggest the business model was already doomed - squeezed by internet retailers and supermarkets whose scale enables them to offer CDs and DVDs at cheaper prices.
what do you think?
field_pete
People bought gift vouchers in good faith and they should be honoured, it is not their fault.
Angharad Fennell
How is it not theft when vouchers have been paid for?? Your only redeeming money that has already been paid. Hmmmm. Surely this cannot be done.
Brian Holmes
The person holding the gift voucher becomes a creditor of that company. Like all the other creditors, they will be entitles to a percentage of the company's net worth when the administrators have sorted everything out - but they will actively have to place their claim. In reality, it's probably dead money.
Bernice Hancock
Surely if the retailer sold vouchers a month ago that are now worthless. That must be Fraud
Name witheld
This comment has been removed for violations of our Terms and Conditions.
Phil A
I agree. they are hardly likely to call the police are they, especially if you threaten to have the manager arrested on suspicion of fraud if they do. They must have known this would happen and I bet they were selling vouchers and cards right up to close of business yesterday.
james stevenson
again Bryan, it is not the shop staff who should take the stick, get them to give you the telephone number of the board members and get on to them
Philip Burrell
Honour your gift cards HMV, people bought them in good faith and you have a moral duty to them.
Nick Bowden
Not surprised hmv was the dearest shop going for Dvds and cds
blue side
Obviously the 'gift voucher' places you as an unsecured creditor which raises a few questions like when buying a voucher should the money not be held in trust and thus not part of the assets. The law needs addressing on this because you surely create a constructive trust as the company is taking money and holding for a beneficiary and not as payment for specific goods?
william Baker
Not honouring vouchers people paid for in good faith before christmas as presents Etc knowing they would probably be going into liquidation is Fraud in my eyes. Knowingly selling worthless pieces of paper.
Louisa Gieldon
It absolutely is fraud william!
Nigel L
Get down to the stores, demand your vouchers are accepted, cause a fuss, nothing to lose, dont let them walk all over you after all at the end of the day the board members will still be sitting pretty let them see your anger.
james stevenson
Your anger will be given to the wrong people, just like you or I, we have no control over these job destroying morons, as someone said, if their prices had been lower, they might have survived, but the greed of the ones at the top would not allow this, because they would get less of a big fat handout.
Diane Rogers
It won't be them that see the anger
Louisa Gieldon
I wouldn't shout at the staff as they will already be worrying about their jobs. But i would support organised action. Have a sit down in the shop and protest peacefully, refusing to leave until the police get called
james stevenson
I have received an email from them this morning, trying to get me to buy goods. I really do feel sorry for the staff, soon we will not have any high street shops left if this continues, and if the bank of england continues to screw us with stupid interest rates, we will in the end buy even less in the shops. these people making these life destroying decisions are themselves well off, how many poor people do you know who are making a joke of our country?
happymike CHESTER
H.M.V High street pick- pockets not honouring vouchers is theft .Just another example of capitalism and corrupt Government's putting in get out loop holes ,that`s why Goldman Sachs paid out 6 Billion in bonuses in 2011 your money through higher living costs .The greed machine still steaming ahead.
Louisa Gieldon
Got £100 worth of these at the moment, I spent mine but partner was given them by our kids and were bought just before xmas. It is theft and theft from the customers who were loyal to them and actually went into their bloody shops!
Chris King
Just a quick thought but what can gift vouchers buy that money can't?. For me in future I think ill give money as Xmas present rather than vouchers that can be called worthless or invalid as it is not fair to the person buying or receiving the voucher. Especially when it seems people high up in the company knew this was most likely to be the case but they still sold them anyway.
happymike CHESTER
Better giving Gold bars paper money will default soon if Cameron doe`s not sort out his corrupt Banking friends.
Gordon Wright
This is the second major company (after Jessops) in as many weeks to refuse their own vouchers. The answer is clear, do not buy any store vouchers as presents in future give cash instead.....
Diane Rogers
To all those talking about vouchers etc,spare a thought for the staff who have done the work and served you all and don't know if they will be paid
Louisa Gieldon
They have been tricked and cheated nad have a perfect right to "moan" as you put it. We have £100 of these vouchers unused at the momentI But that does not mean they/we have no sympathy fot the staff who mayy lose their jobs. This thread is about vouchers!
Diane Rogers
That's funny I thought that was just the headlines and the first paragraph
Mark Ashpole
Another victim of the internet which is far cheaper than any high st store as it doesn't have the over-heads such as crippling rental costs,building heating costs etc etc plus the higher staff requirements which must now be much more expensive following recent pension requirements for employers amongst other things. Im sure there will be more to follow
DazzaMac71
HMV were always one of the dearest shops for DVD's etc. A DVD in Asda for £13 was always £15 at HMV so havent bought from them in years. However, my son has a HMV voucher for £25 which was bought in December as a Christmas present. 4 weeks later its not valid?? LOL LOL LOL trust me... we will be taking goods from the store to the value of £25 and they WILL take the vouvher as payment because we will be leaving the store with those items whether they do or not. Take me to court for theft... they were happy to steal my money 4 weeks ago when they knew this was in the pipeline...
fish41
Dont blame you one bit. Think everyone should do that who has vouchers. Record it for your own benefit that you are offering the voucher in payment. It would have to be the administrators who take you to court--would they be bothered ? Dont know if you could take HMV to court for fraudulently selling you a worthless piece of paper in the guise of a voucher--do HMV they still exist?
nick tansley
for decades before the 'net' we were ripped off by overpriced goods on the highstreet in this country + VAT, now we're supposed to feel sorry that the business goes under. Businesses should make sure they make adequate provision for the future during the GOOD TIMES so disasters like this can be more easily handled and maybe averted instead of filling shareholders pockets and paying bonuses and large pensions to management. The staff in Torquay found out from the national news yesterday. Jessops torquay has also just closed this week. The high street cannot compete with the net and never will. Torquay high street is now mainly; empty shop, charity shop, mobile phone shop, pasty shop, mcdonalds, primark. This decline isn't just the fault of the net though, greedy landlords charging stupid amounts for leasing properties are also to blame. The new bypass into Torquay will be built just in time for everyone to leave this Ghost-town!!
Diane Rogers
Shrewsbury is the same we had two Jessops,And our prison is closing
Adrian Wagstaff
People just realised they have far more useful things to spend their money on than listening to grown adults singing "Boombaloomba" songs full of unprintable words and they can make their own films for FREE-ish and watch them on the internet instead of paying for the rubbish Hollywood produces. They also discovered they can make their own music and it sounds better than what they were all standing around in HMV shops listening to.
Robbie369P .
8:46am on 15/1/2013
While I feel sorry for all the staff, I am sure they knew that this would happen, yet happily sold vouchers in the run up to Christmas, knowing that they would be worthless.
Diane Rogers
11:22am on 15/1/2013
Don't blame the staff,our son found out about it on the news last night.
Louisa Gieldon
1:09pm on 15/1/2013
What could the staff do. They'd get the sack if they tipped people off. There have been warnings and rumblings for weeks, even before christmas. We told our sons the week before xmas not to buy the vouchers. But boys being last minute gift buyers, that's what we got. I spent mine in time but my partner has £100 worth sitting here useless and i feel that my sons got cheated. I feel angry about it