High street chain will also pay proceeds from charity singles in full, after accountant Deloitte finishes review of business
Accountant Deloitte, which took control of HMV last week, also moved to reassure charities owed money from the sale of charity releases – including the Hillsborough Justice Collective single – that they would be paid “in full as soon as possible”.
Nick Edwards, joint administrator for HMV and its Fopp offshoot, said he was pleased to announce that, after the conclusion of an assessment of the business, stores would honour gift cards.
“I can also confirm that all money raised by HMV for various charities will be paid in full. 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 gift cards and vouchers worth millions were declared worthless when the retailer collapsed into administration on 15 January. The move angered consumers because HMV had continued selling the tokens after warning investors in December that the group expected to face a solvency crisis by the end of January.
A Deloitte spokesperson initially insisted the administrators had no intention of reviewing the decision to stop accepting vouchers. Edwards then said the administrators were assessing the state of the business and added: “The ability of administrators to honour gift vouchers will depend on the specific circumstances of each case.”
The administrator has not said how long the gift vouchers will be accepted for, but shoppers are being urged to use them as quickly as possible.
The move will be considered a victory for customers, who mounted a high-profile campaign to convince the administrators to reinstate gift voucher purchases. Deloitte performed a similar U-turn following bad publicity when electrical retailer Comet went into administration before Christmas.
Labour’s shadow minister for consumer affairs, Ian Murray MP, wrote to Deloitte asking for the vouchers to be reinstated. He said: “I’m delighted that HMV and their administrators have reconsidered. I’m sure consumers will be delighted that they will be able to use those Christmas gifts after the initial disappointment last week when the administrators said they would not be accepted.”
Andrew Johnson, director general of the UK Gift Card and Voucher Association, said: “As an industry, the HMV situation has not been great for us, so we are very pleased that the administrators have reversed their decision.
“We would like to see a change in the rules so that vouchers must continue to be accepted by retailers all the time a company is still trading, because that is what really upset consumers.”
It is thought the administrator performed its U-turn because it did not want to inflict any long-term damage on the HMV brand – Deloitte has said that at least 50 groups or individuals have expressed an interest in buying part or all of the business, with turnaround company Hilco – which owns HMV Canada – thought to be the frontrunner. Hilco is already helping the administrators run the HMV chain.
A coalition of music labels and film studios are also reported to be preparing a package for HMV that includes cut-price CDs and DVDs as well as generous credit terms, in a bid to help the 92-year-old retailer maintain a visible high street presence and ongoing rivalry with online sellers.
Consumers greeted the news warmly on Twitter, though there was speculation as to whether many shoppers would already have thrown their vouchers away. @HelenCLondon wrote: “Yay HMV are accepting vouchers! *phew* £10 back in my pocket.”
However, consumers in Ireland were still indignant that there has been no reversal from Deloitte on the 16 stores that went into receivership. All the stores operated by HMV Ireland, a separate company from the UK business, have been closed.
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