When a popular high street chain is forced to enter administration, there are always a number of factors administrators must take into account. Any debt accumulated which must be paid off and the number of staff who must be looked after during the process will always be the most important issues to address. Disposing of the company’s commercial properties is another.
The rights of consumers who have spent money in the chain’s stores must also be adhered to. This means attempting to uphold agreements in terms of warranties and gift vouchers purchased before the administration process began.
This is the situation HMV administrators at Deloitte found themselves in when assessing the position of the stricken retailer. Over the Christmas period, many consumers received vouchers for games, CDs or DVDs which could be redeemed either in store or on the retailer’s website – yet Deloitte announced that gift cards were no longer able to be redeemed in HMV premises, leading to a backlash from gift card holders on social media sites such as Twitter and Facebook.
Fortunately, after reviewing records and getting to the bottom of HMV’s financial position, Deloitte have revealed a change of position with regard to gift cards. Customers who are in possession of a voucher can now use it as either full or partial payment for purchases made in any of the 223 UK stores occupied by the music and entertainment chain.
All money made from charity singles, such as the Christmas number one in aid of families involved in the Hillsborough Disaster, will also be paid in full to the organisations in question.
Administrators from Deloitte voiced the hope that a buyer will soon be found for the ailing chain, and are determined to keep as many stores open and trading in the meantime as is financially viable.
In a statement, Deloitte said; “We will continue to assess the longer term options for the business whilst continuing to trade.
“We are hopeful that this process will result in the business continuing as a going concern.”
Rumours of potential buyers for the high street favourite have come thick and fast, with individuals and companies within the music and film industry at the forefront of the mill. However, it appears that the eventual buyer could be a company which already owns a stake in the HMV international company.
Restructuring specialist Hilco is currently the odds-on favourite to take over the UK leg of operations, especially after its successful purchase of HMV Canada in 2011 for £2 million. And, according to sources within the entertainment industry, a consortium of film studios and music labels have already unofficially thrown their backing behind this scheme as they believe it would allow them to continue trading in the same vein as the present day HMV.
Suppliers for the UK leg are also believed to favour Hilco’s bid, with generous credit terms being laid on the table for the restructuring giants. However, according to Deloitte Hilco is by no means the only interested party, with over 50 different groups or individuals already having expressed their desire to buy either all or part of the high street brand.
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