Disgruntled customers with HMV gift vouchers will be able to spend them once again in stores from tomorrow morning, administrators have confirmed.
Deloitte, which is handling the affairs of the bust music chain, had originally stopped customers spending the vouchers, leading to angry scenes in stores. Today the administrator said that it had been "urgently assessing the company's financial position".
"I am pleased to confirm that, having concluded this assessment, we are able to honour gift cards. I can also confirm that all money raised by HMV for various charities will be paid in full," said Nick Edwards, who has been appointed Joint Administrator for the chain. "We recognise that both of these matters have caused concern for individuals and organisations affected and are pleased to have reached a positive outcome."
In addition to the vouchers, HMV owed the victims of the Hillsborough disaster £150,000 from the Hillsborough Justice Christmas single. The version of the Hollies' hit He Ain't Heavy, He's My Brother by The Justice Collective was launched at Liverpool's HMV store. Deloitte's announcement today ensures that the affected families will get the money.
Millions of pounds worth of HMV gift cards many received as Christmas presents became effectively worthless the second the company collapsed so the turnaround on behalf of the administrators is a relief for many. Once a company is in administration, the administrators are under no obligation to honour the vouchers.
Gift vouchers are in effect a debt owed by the company. If the issuer goes bust, anyone with a voucher becomes an unsecured creditor, with a long and uncertain wait to get any money back. However, administrators have discretion to carry on accepting vouchers after a company has failed.
However, if the business is sold to someone else there is no guarantee that they will continue to accept the vouchers, so shoppers should act fast. Even if a business is sold and continues trading under the same name the new owner is a separate legal entity and is under no obligation to honour the obligations including vouchers issued by the original concern.
There has been speculation that HMV will soon be bought by another company, although sources close to the company said they did not expect an announcement today.