U-turn on HMV gift cards as its survival hopes improve

The administrator to HMV yesterday performed a major U-turn and said the failed retailer's gift cards could be redeemed in stores from tomorrow, as hopes were raised that the chain's 200-plus stores could remain on the high street in the short-term.

Deloitte is locked in talks with Hilco, the restructuring firm, about striking an unusual deal that would see it assist the administrators in running the UK retailer, while the accountants seek to complete a formal sale of HMV.

Denby Pottery owner Hilco, which acquired HMV Canada in 2011, also remains the front runner to acquire the UK chain. Its bid is apparently backed by a consortium of music and film giants, such as Warner Music and Sony Pictures, among others.

In a traumatic fortnight for the high street, the collapse of HMV last week was closely followed by the administration of the DVD rental firm Blockbuster, which already plans to shut 160 of its 528 shops.

Deloitte caused anger among shoppers by not honouring HMV's gift cards. At the time, 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."

In an apparent response to the backlash, Deloitte yesterday said that all holders of HMV's gift cards will be able to cash them in at its stores from this morning. There are estimated to be up to £7m-worth of gift cards outstanding.

The accountancy firm also said proceeds raised by HMV through the sale of charity releases, including the Hillsborough Justice Collective single, will be paid "in full" as soon as possible.

Nick Edwards, the joint administrator, said: "We recognise that both of these matters have caused concern for individuals and organisations affected and are pleased to have reached a positive outcome."

HMV had kept accepting gift cards up until the afternoon of 14 January, the day before it formally fell into administration. While it is standard practice for administrators not to honour gift cards, Deloitte performed a similar U-turn following the collapse of the 236-store electricals chain Comet before Christmas. The accountancy firm explained that it had been "urgently" assessing the financial position of HMV, such as the value of outstanding gift cards.

Hilco, which declined to comment, remains in talks with Deloitte to hammer out a full-blown rescue deal for the retailer.

However, any such deal will be complex due to the large supplier base, HMV's debts of £176.1m and the fact it has a substantial number of loss-making stores. The eventual closure of some stores is inevitable.

The private-equity companies, Endless and Better Capital, and the restructuring company Gordon Brothers also remain interested in acquiring parts of HMV. The video games retailer Game, which is owned by distressed investor OpCapita, is looking at up to 45 stores.

Meanwhile, as many as 388 jobs could be lost after the Midlands Co-operative yesterday said it was closing nine of its department stores.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...