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.”

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Arts and Entertainment
British musician Mark Ronson arrives for the UK premiere of the film 'Mortdecai'
music
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us