'No refunds, no exchanges, no gift vouchers': Collapsed HMV under fire as it refuses to accept vouchers it was selling until MONDAY



Retailer has struggled in the face of growing demand for digital downloads

Company had a poor Christmas sales period despite 35% sales reduction



Almost 300 stores and 4,350 staff face uncertainty as negotiations unfold

Administrator announces gift cards will not be accepted in stores

CEO Trevor Moore - former head of Jessops - insists company will be saved



Thousands of families with vouchers and gift cards from HMV will find they are worthless after the High Street chain called in administrators.

HMV was selling the vouchers all through Christmas and up until Monday – despite the fact the management must have known the company was on the brink of failure.

Now the accountants brought in to run the chain, which has been part of national life since 1921 and has 239 shops and 4,500 staff, have decided not to honour them.

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Sale: Customers will be hoping for bargains from the administration of HMV, whose Oxford Street branch is pictured here today

Warning: Posters in the windows of HMV stores in Liverpool, left, and Oxford, right, tell a harsh story



As a result, tens of thousands of customers are thought to have been left with worthless cards and vouchers, which together are likely to have a face value of several million pounds.

The news infuriated consumer groups, which called for the UK’s administration regime to be overhauled to protect shoppers.

The chain’s collapse also led to a political row as Business Secretary Vince Cable appeared to partly blame online retailer Amazon for the current crisis on the High Street.

Day the music died: Administrators Deloitte warn that shops will now close

Flagship: HMV's store on Oxford St pictured in 1939, offering 'home entertainment and electric housekeeping'





He said he was ‘personally worried’ by the demise of HMV, adding that the tax affairs of Amazon, its major rival, were ‘very disturbing’.

Last night Richard Lloyd, executive director at Which?, said: ‘It is outrageous that consumers, once again, are left out of pocket when a retailer refuses to honour gift vouchers.

‘We want the rules on gift vouchers and insolvency to be reviewed to ensure consumers are adequately protected in cases like this.’

Disappointment: Journalist Hugh Pym was among the customers who had bought HMV gift cards

Jokes: Twitter users, including the BBC's Jeremy Vine, posted witty pictures about HMV's demise

CARNAGE ON THE HIGH STREET

HMV's announcement that it is to go into administration makes it the latest in a long line of high-profile high street firms to fail - the most visible legacy of the financial crisis and subsequent double-dip recession.

December 2008: MFI, the furniture retailer, was one of the first major firms to go out of business at the start of the downturn, as retail sales began to fall following a sharp rise in unemployment

January 2009: Woolworths, right, shuttered its 800 stores, bringing home to many the scale of the UK's economic collapse as the country entered recession for the first time

February 2009: Zavvi, HMV's chief rival, stopped trading around Christmas - and refused to honour its gift cards, leading to widespread customer anger

December 2009: Borders, right, was another entertainment behemoth to go under as sale of CDs and DVDs were squeezed by digital downloads and online retailers

October 2012: JJB Sports closed all but 20 of its stores, which were taken over and re-branded by Sports Direct - leading to the death of the JJB brand and 550 employees losing their jobs

December 2012: Comet, right, shut down just before Christmas, leaving nearly 7,000 staff out of work and forcing the taxpayer to pick up a £50million tab related to its bankruptcy, which was blamed on soaring energy prices and a reduction in the number of home buyers

January 2013: Jessops was closed by administrator PwC earlier this month after years of struggling with online competition as customers turned away from traditional photography

NEXT? Past Times, Blacks and Hawkin's Bazaar are among the many other firms which have entered administration but been able to survive in some form. However, as the economic recovery remains fragile these companies could tip back into serious trouble.

Dean Dunham, the founder of youandyourrights.co.uk, said: ‘We’ve got to see some changes in this area. It’s almost theft.

‘A gift voucher should be as good as a banker’s draft. You should be guaranteed that you’ll either be able to redeem it or get your money back.’

He said consumers should now boycott all gift cards and vouchers until their money is protected.

Accountants Deloitte, who oversaw the closure of Comet before Christmas, have been put in charge of deciding the future of HMV.

It became a retail powerhouse with a stock market value of £1billion and coped with enormous technological change with the move from vinyl and record players to cassette tapes and CDs.

However, it has effectively been killed by the internet and the failure of management to cope with its impact on how people buy their entertainment.

In 2003, the firm’s then managing director, Steve Knott, dismissed music downloads, famously telling colleagues that he did not see them as a threat.

In fact, millions switched to buying music, films, games and TV programmes direct from the web, through sites such as Apple’s iTunes or subscription services such as Spotify.



Digital sales of music in the UK topped the £1billion barrier for the first time in 2012, while 99.6 per cent of all music singles are now bought via download.

At the same time, HMV customers who want a CD, DVD or video game they can hold in their hand have switched to web retailers such as Amazon or the big supermarkets.

HMV staff now face losing their jobs amid a High Street bloodbath that has wiped out many famous names in recent months.



Among the others to go into administration are Comet, Peacocks, La Senza, Blacks, Game, Clinton Cards, and JJB Sports, while more are expected.

HMV’s sales over the crucial Christmas period were down by around 10 per cent on a year ago.

It made a loss of £36.1million for the six months to the end of October, while its debts grew to £176.1million despite the sale of assets including the Waterstones book chain.

Last night chief executive Trevor Moore suggested HMV could be salvaged in some form, saying: ‘I’m confident that we will find a solution.’ He promised efforts to safeguard jobs.

Iconic: Nipper the dog, left, and the HMV delivery van, right, are among the famous symbols of the store MOVING TRIBUTE TO NIPPER, THE ULTIMATE ICON OF THE HMV ERA One HMV fan showed his or her passion for the troubled chain by placing a bouquet of flowers next to a statue of the iconic dog Nipper.

The stone carving sits on the side of building in Bristol where the terrier lived in the late 19th century.

An anonymous card placed with the flowers contained a heartfelt message about the demise of HMV.

'With deepest sympathy,' it read. 'Thinking of you, Nipper, the HMV dog. You brought music into all our lives. Love always.'

Nipper belonged to Mark Barraud, a set designer at the Prince's Theatre in Bristol.

After Barraud's death in 1887 Nipper was inherited by his brother Francis, who noticed how the dog would stare at the gramophone whenever a recording of his late owner was played.

Francis painted the scene - entitled 'His Masters Voice' - and the Gramophone Company, which would later become HMV, bought the rights to the image.





Biggest victim of the internet giants By Alex Brummer

Of all the high street chains to have gone into administration in recent years, HMV – His Master’s Voice – is the most evocative and its demise the most significant. There is an affection for the brand, with its iconic logo of Nipper the dog listening to the phonograph, that stretches across generations. Most worryingly, its collapse symbolises how neglectful successive governments have been of one of the nation’s most creative industries.

Original: The Oxford Street store in 1922, a year after it was officially opened by composer Edward Elgar EMI, the record company which signed The Beatles, Pink Floyd and Coldplay and which owned HMV until 1998, has already been sold to foreign buyers and broken up. Now the nation’s last specialist record and CD retailer has seen its business model destroyed. The main public focus will rightly be on 4,000 lost jobs, more empty stores on the high street and consumers left with gift vouchers that are unlikely to be honoured. Yet the deeper, more troubling fact is that HMV is the latest in a succession of electronic and entertainment retailers to have bitten the dust since the onset of recession in 2009. These include Woolworths, once the nation’s biggest seller of DVDs, Zavvi (formerly Virgin Music), Comet and, last week, photography specialist Jessops. All of these were trapped by the squeeze on household incomes (the biggest since the 1920s) and by the advance of technology and competition from supermarkets and internet giants. Certainly, economic conditions have played their part. In the wake of the collapse of the world financial markets, banks became much more risk-averse. Bright lights: The store was lit up with adverts for classical recordings during the 1920s

Having given the company one last chance over Christmas, HMV’s banks and creditors decided they had no choice but to call in nearly £200million of debt. As for the march of technology, too many managements of retail businesses were slow to recognise the threat of online sales and of MP3 players and iPads. But a more sinister factor has also been in play. Digital giants Google and Amazon were initially welcomed by the Government as if they represented the second coming for the British economy. Yet by allowing consumers access to pirate download sites at no cost, Google has essentially deprived musicians and recording studios of their intellectual property rights.

HMV ON THE BRINK OF EXTINCTION AFTER 90 YEARS ON THE HIGH STREET

HMV stands for His Master’s Voice, the name of an 1898 painting of a dog called Nipper listening to a cylinder phonograph (right).

Rights to the image were bought the following year by the Gramophone Company, who asked the artist to repaint the work with a wind-up gramophone.

The Gramophone Company opened the first HMV store on Oxford Street, central London, on 20 July 1921.

It later merged with the Columbia Gramophone Company in 1931, to become EMI. They opened HMV stores across the UK and by 1977 had 39 stores stretching from Glasgow to Brighton. The Oxford Street store played an important part in helping the Beatles land their record deal - setting them on the path to becoming the biggest band in history.

In February 1962, the band had just been rejected by Decca Records, who famously said that 'guitar groups are on the way out'.

Undeterred, manager Brian Epstein paid a visit to HMV to transfer the band's demo tape to disc - and the engineer who helped him was so impressed he called a music publisher down to hear the record.

The publisher got in touch with George Martin, who was quick to sign up the band and later produced their legendary albums.

HMV Media Group broke away from EMI in 1998. Today the group runs 239 stores in the UK and Ireland. It owned bookshop chain Waterstones until last year.

The company has 4,350 employees in the UK.

Nipper, the subject of the HMV logo, is buried in Kingston upon Thames in a small park surrounded by magnolia trees. A small road nearby was renamed Nipper Alley in his memory in 2010.



For its part, by offering discount prices and operating on wafer-thin profit margins, Amazon has attracted huge custom. But it has a longer-term business model. Once it has put its competitors out of business, it will gradually raise prices, exploit its monopoly and make a financial killing.

Apple, too, despite its cool image, is killing the High Street. After enticing consumers into its glamorous high-tech stores and selling them its devices, it insists that the only products that can be downloaded on them are through its iTunes applications.

This way, it makes money out of both consumers and producers. The consumers by charging them premium rates for downloads; and the music producers and book publishers by charging them for the ‘privilege’ of being on its devices.

Of course, the economic damage would not be so great if these digital giants created many new jobs and paid their taxes. But many of these companies have set up headquarters offshore in low-tax countries such as Ireland. All of them are expert at tax avoidance, contributing next to nothing to Britain’s exchequer.

As for HMV, clearly profound mistakes have been made by its management, headed until recently by Simon Fox (who left his post last summer for media company Trinity Mirror).

The bosses gave the impression that they knew what they were doing. Their so-called ‘strategy’ was to jettison assets, such as Waterstones, one by one. The aim was to buy time and keep the creditors at bay. This week, though, the music stopped.

We now have no native large-scale record-producing company and no retailer capable of giving the next big music discovery the national distribution needed for take-off. Shame.