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
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: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower