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.”

PROMOTED VIDEO
News
Teeth should be brushed twice a day to prevent tooth decay
education
News
Bryan Cranston as Walter White, in the acclaimed series 'Breaking Bad'
news
Sport
footballChelsea 6 Maribor 0: Blues warm up for Premier League showdown with stroll in Champions League - but Mourinho is short of strikers
News
Those who were encouraged to walk in a happy manner remembered less negative words
science
Arts and Entertainment
Princess Olga in 'You Can't Get the Staff'
tvReview: The anachronistic aristocrats, it seemed, were just happy to have some attention
News
Renee Zellweger as Bridget Jones
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech

Board creates magnetic field to achieve lift

News
There have been various incidents of social media users inadvertently flouting the law
news

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Sport
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
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

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London