Now HMV into Admin

[road2ruin]

The one issue I have is that they knew this was going to happen yet sold gift cards and vouchers over Xmas period. They should have stated that vouchers would only be valid for 14 days after xmas. If the directors continued to trade and allow effectively worthless vouchers to be sold then they should be prosecuted under the directors disqualification proceedings

No gift cards or vouchers being accepted by hmv, agree with jpenno as they knew they were in trouble before Xmas so why blatantly just rob people by selling these worthless cards

This is the biggest disgrace. Have just been into Kingston and HMV is like a warzone. They have had to get added security and a number of police officers down there due to the number of angry customers who have very recently bought vouchers and now being told that they're worthless. Others complaining that they bought a product at the weekend which doesn't work and no exchanges/refunds are being offered.

 

[SwingsitlikeHogan]

Possibly, maybe... Doesn't bode well for the future either way...

No it doesn't does it?

 

[SwingsitlikeHogan]

This is the biggest disgrace. Have just been into Kingston and HMV is like a warzone. They have had to get added security and a number of police officers down there due to the number of angry customers who have very recently bought vouchers and now being told that they're worthless. Others complaining that they bought a product at the weekend which doesn't work and no exchanges/refunds are being offered.

Isn't the problem that any ltd company like HMV have is that they can't give any advance indication that they may be about to go into administration, liquidation etc. as that would be in breach of 'stock exchange rules'.

 

[road2ruin]

It's Nipper that I feel sorry for....

 

[beck9965]

Will this affect Nipper ?

He's gone to live on a farm!

 

[SyR]

I actually used HMV quite a bit as my office is just round the corner from the Leicester Square branch. It was very handy shopping there in my lunchbreak. Just before Xmas I bought two Google Nexus tablets and received two £10 vouchers as part of the offer they had. This news means we can kiss goodbye to the £10 voucher we didn't spend plus all the loyalty points that we built up but haven't yet spent!
I think that HMV and Jessops e.t.c. have been hurt more by Amazon over the years, it's very hard to complete with a company that is based off-shore and pays almost no tax.

 

[doublebogey7]

Isn't the problem that any ltd company like HMV have is that they can't give any advance indication that they may be about to go into administration, liquidation etc. as that would be in breach of 'stock exchange rules'.

Yes but the rules are there for good & obvious reason.

 

[SwingsitlikeHogan]

Yes but the rules are there for good & obvious reason.

Absolutely agree - I wasn't saying that they were in some way a problem - just means that the like sof HMV can't say to customers 'don't bother buying anything - we're going bust on Tuesday'

 

[FairwayDodger]

Absolutely agree - I wasn't saying that they were in some way a problem - just means that the like sof HMV can't say to customers 'don't bother buying anything - we're going bust on Tuesday'

Which is all very well but when someone like my brother who doesn't have much money pays out for a voucher for an Xmas pressie it sticks in the throat that his money's gone. I think they quite cynically sold as many of these pre-xmas knowing damn well they were ripping people off. If he asks I'll tell him I spent it last week because knowing him he'd try to replace it otherwise!

 

[Hacker Khan]

Do people still pay for music when it's free on the internet?? How quaint and 1990s.

It's been going the tubes for ages now, they just can not compete on price and also do not have the specialist niche to trade on either. Can't say it will effect how I get hold of music (and yes I do actually pay for it before the pious brigade accuse me of bankrupting HMV, putting 4,000 people out of a job and threatens to email my details to the BPI). It's slightly sad to see and feel for those who may lose their jobs, but then again it's not as if you can't get hold of what they sell elsewhere and often cheaper.

And I am still slightly bitter after HMV rejected me for a place in their graduate scheme several moons ago.

 

[JustOne]

Don't most of us wish for cheap and convenient? We ought to be careful what we wish for. 'Donut' towns here we come - and we as consumers will have made it so.

I agree. I don't see any point arguing/worrying about it though, what did people THINK was going to happen once itunes took over music? If you ask what our highstreets really NEED then I think lots of people are going to be disappointed. Nik-naks (£1 shops), places to socialise (coffee shops) and clothing is about all that's required, everything else will be in the supermarket (out of town retail park). I can see estate agents being hit really hard as soon as someone makes the house buying process completely electronic... when are Apple releasing iHomes? Banks, grocers, butchers, toyshops etc will all become highstreet ghosts eventually amongst others.

Bad form with the HMV voucher thing, they could have just claimed to have run out of vouchers before Christmas, printing error or something.... or retain the funds knowing that payback was imminent.

Good time to become a hairdresser if you ask me... online haircuts are not going to catch on!!!!

 

[Lanark_Golfer]

HMV in Administration?

Not another Newco emerging claiming to still have all sorts of records! :lol:

 

[DAVEYBOY]

I do like to have a look around HMV so will be sad to see it go if it does.

 

[bladeplayer]

The one issue I have is that they knew this was going to happen yet sold gift cards and vouchers over Xmas period. They should have stated that vouchers would only be valid for 14 days after xmas. If the directors continued to trade and allow effectively worthless vouchers to be sold then they should be prosecuted under the directors disqualification proceedings,

100% agree with this , they should have to accept these as long as they are open to the public , they can take cash but not vouchers .. bad form

 

[WideEyedFox]

It's not just Amazon/iTunes they were competing with - almost every other high street store that sold chart music and DVD's beat them on price. Even without the off-shore online shops and iTunes HMV's days were numbered.

People blame online shopping, but many shops have been at risk since magazines started putting the information the public want in their hands every month, along with special offers from other retailers listed in the back. I remember travelling to Richer Sounds and SuperFi in Birmingham to buy audio equipment because it was cheaper than my local audio shop in town who could not price match. No internet, just a bit of time reading the reviews and checking the prices in the back of the magazines saved me over £150.

Shopping has evolved this way. You give the public the information to know what they need/want, reviews and opinions of others who have tried it, and a list of the best places to obtain it - and they will go ahead and use it. The internet is the tool of choice today, but 25+ years ago for many it was magazines doing the same thing to the small shops.

Any computer technician, mechanic, plumber, electrician, landscaper etc. will have seen their business stripped away by making their knowledge and skills available to the masses, which then do it themselves rather than call an "expert". Years ago their daily rates and call out costs made it a pleasure to go to work, today their knowledge is printed on a sheet of paper and handed out free to every tom-dick-and-harry who wants to have a go themselves. Granted, some will prefer the reassuring presence of a professional, and some will screw it up and need help - but there are quite a few who will figure it out themselves.

Even the local golf pro trying to convince his members to book lessons is up against the latest tour star DVD, YouTube, and golf magazines.

There is little concept for the value of things. Music, videos, games etc. are all consumed as if they were nothing more than a bar of chocolate, except in some cases no real money is even handed over. Instead a transaction takes place for your purchase, but your wallet/purse/pocket is no lighter.
As things become so easily accessible we put in less time and effort to obtain them, and thus we have less of a connection to our purchase as it has no real memory or experience associated to it. It is just a transaction, and in its digital form holds little to be desired or cherished.

For music, videos, games and books it was always going to go this way. Before iPods and iTunes, before piracy and unlimited downloads, before shop closures and job losses - we were all looking to get more for less.

We are consumers, and we are consuming.

 

[drawboy]

I never liked going in to HMV due to the amount of shoplifting that went on there were more store detectives than customers in our one in Leeds City Center. I remember cutting through it once, I was followed from the moment I entered to the front door when I left. Not their fault but it was an experience I never wanted to repeat.

 

[MegaSteve]

I remember cutting through it once, I was followed from the moment I entered to the front door when I left.

Well, thats what happens when you wear a baseball cap under your hoodie ...

 

[doublebogey7]

100% agree with this , they should have to accept these as long as they are open to the public , they can take cash but not vouchers .. bad form

Would you feel the same way if you were another creditor of this company. If a buyer is found then I have no doubt that vouchers will be accepted again, so don't go throwing any away. But whilst there is the potential that other creditors won't receive a penny then these creditors cannot either.

 

[Picto]

Which is all very well but when someone like my brother who doesn't have much money pays out for a voucher for an Xmas pressie it sticks in the throat that his money's gone. I think they quite cynically sold as many of these pre-xmas knowing damn well they were ripping people off. If he asks I'll tell him I spent it last week because knowing him he'd try to replace it otherwise!

I'm certainly not an insolvency practitioner, but I have had involvement with both sides of corporate insolvency, so for me I can see both sides of the argument / issue.

Where people buy gift cards it is rotten luck that they cannot use them, especially when a co goes into administration so shortly after Christmas, which is when most gift cards are probably purchased. Rules is rules as they say and the directors and administrators have legal duties to creditors as a whole and under the current law gift card holders are creditors.

My brother's a student and lots of people bought him various gift cards over Christmas to help him out with uni book purchases, etc etc. If, say, Waterstones went then he would be gutted and it would hit him hard where he's relying on those gift cards to make essential uni purchases that he otherwise cannot afford.

Where those are saying that it was wrong of the directors to allow gift cards to be sold when they knew that administration was round the corner, I agree that morally that is pretty low - if the board did think that there was a good chance this would happen. To play devil's advocate, and again from my experience of corporate insolvency, directors tend to be overly optimistic about their company's survival. As I mentioned on the Jessops thread, it tends to be one of the Quarter Rent Days that pushes a company over the edge. Christmas Day is a rent day. The directors (rightly or wrongly) may have believed that Christmas sales were going to be enough to save the co on that rent day. If that genuinely was the case then selling the giftcards may not have been as out of order as it appears.

The issue with gift cards is the public's ignorance about them. Not through the public's fault, but insolvency law as it stands doesn't seem to apply common sense!

Really, the whole issue of gift cards needs to be sorted out by the govt. Perhaps any retailer selling gift cards ought to pay into an indemnity scheme (a bit like the FSCS) where if they go under those people who have bought gift cards are covered?

 

[Picto]

Would you feel the same way if you were another creditor of this company. If a buyer is found then I have no doubt that vouchers will be accepted again, so don't go throwing any away. But whilst there is the potential that other creditors won't receive a penny then these creditors cannot either.

You're right. The issue as I see it though is that the other creditors (largely) are corporations who understand the risk of being creditors to these kinds of company. In fact they run a business that profits on this (well attempts to anyway). Mr Joe Public doesn't realise that is the legal relationship he has with a company he's bought a gift card for. Most Mr Joe Publics have little or no understanding of the Insolvency Act! As far as he's concerned it works just like cash.

So whilst that is the law (and as I've said above I completely understand the reason why it is why it is) I think something needs to be done about gift cards situation. Either better education for the public about them or changing the way they are used - such as an indemnity scheme, etc.