Chief executive says 'HMV still has a place on the high street' as customers are told that their gift vouchers are worthless

Thousands of Christmas gifts have become worthless overnight

The chief executive of HMV has insisted that the failed entertainment chain has a future on the UK high street, as it emerged that the retailer’s outstanding vouchers and gift cards are now worthless. 

The 92-year-old retail group collapsed by appointing Deloitte as administrator today, leaving the future of 4,123 staff hanging by a thread. But Trevor Moore, the chief executive of HMV, said: “We remain convinced we can find a successful business outcome. We want to make sure it remains on the high street,” adding: “We know our customers feel the same way.”

Mr Moore, the former boss of the camera chain Jessops, which shut its 187 stores last week, vehemently denied there had been any form of “mis-selling scandal” over the decision taken by Deloitte not to honour gift cards, or vouchers, held by consumers, adding that directors had been closely monitoring redemption levels.

Weighed down by rising debt of £176.1m, HMV has been battered over the past decade by rampant price deflation in CDs, DVDs and games, the big supermarkets, the online giant Amazon and the huge shift to digital downloading.

Nick Hood, an analyst at Company Watch, the credit information specialist, said: “The recession has only played a small part in the sad demise of HMV. The main culprit has been the relentless move to downloads and online purchasing of music and films, as well as irresistible competition from the major supermarkets, who have pushed market prices down to levels with which HMV has been unable to live.”

HMV’s collapse means that nearly 200 retailers have collapsed over the past 12 months, including the electricals chain Comet just before Christmas and the sportswear retailer JJB in the autumn. It is also last remaining nationwide entertainment chain, following the disappearance of retailers such as Our Price and Zavvi. 

Deloitte will continue to trade the retailer’s 223 UK stores as it seeks a buyer for all, or parts, of the business. The restructuring firm Hilco could be interested in acquiring a slimmed-down version of HMV. Hilco has delivered an uplift in sales at HMV Canada since it acquired the business from the UK-listed entertainment group in 2011 and has established relationships with many of the same suppliers.

The private equity turnaround specialists, Endless and Better Capital, could also run a slide rule over HMV.

Sources believe that up to half of HMV’s stores could eventually close within a year, as part of any rescue deal that would see it debt burden slashed.

Its trading over Christmas was hit by Google and Apple not supplying it with their popular iPad and Nexus tablet devices, respectively. Mr Moore said: “We had a very limited supply of two key brands of tablets.”

He described HMV’s performance over Christmas as “disappointing”, adding that it was at a similar level to the 10.2 per cent fall in like-for-like sales over the six months to the end of October.

Mr Moore declined to comment on the value of outstanding HMV gift cards in the market, but said there had been a “very high levels of redemptions after Christmas” until Monday evening when they were suspended.

While it is typically standard practice for administrators not to honour gift cards or vouchers, industry experts called for changes. Dean Dunham, the founder of youandyourrights.co.uk, said: “We’ve got to see some changes in this area. It’s almost theft.” He added: “A gift voucher should be as good as a banker’s draft.”

HMV had been fighting for its life since it issued a “going concern” warning before Christmas and had been involved in crisis talks with its eight-strong banking syndicate, including Royal Bank of Scotland, Lloyds and Santander.

Neil Saunders, the managing director of Conlumino, the retail consultancy, said: “By our own figures, we forecast that by the end of 2015 some 90.4 per cent of music and film sales will be online. The bottom line is that there is no real future for physical retail in the music sector.”

Nick Edwards, joint administrator and restructuring services partner at Deloitte, commented: “HMV is an iconic retailer and continues to be a very popular brand, but as we have seen with many high-street retailers, the market is changing rapidly and conditions are currently very tough.”

Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
tvExecutive says content is not 'without any purpose'
News
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
News
London is the most expensive city in Europe for cultural activities such as ballet
arts
Arts and Entertainment
Jeremy Clarkson has rejected criticisms of his language, according to BBC director of television Danny Cohen
tv
Extras
indybest
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Application Support - Enterprise Java, SQL, Oracle, SQL Server

£45000 - £55000 per annum: Harrington Starr: A well-established financial soft...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape