This Thursday on the Wild Show, Phonic FM I spoke with JD about the apparent closure of HMV and the decision not to respect gift vouchers. Our guests were Carl Munson and Roxy from Seale Hayne who unexpectedly also raised the HMV gift vouchers topic when I mentioned that Run Devil Run by Paul McCartney was probably in stock. I have put the two clips on YouTube-
So the concern on this issue is widely shared.
As reported in the Guardian-
A senior Tory backbench MP has accused HMV bosses of committing theft by continuing to sell vouchers when they must have been aware "there was little prospect of those vouchers or gift cards ever being redeemed".
Sir Tony Baldry, a practising barrister specialising in commercial law, said "directors and management must have known that the company was at very real risk of failure" whilst they continued selling vouchers "all through Christmas and up until the day they went into administration".
Exeter's city centre manager John Harvey said he hoped HMV could be saved.
"Administration doesn't necessarily mean closure and there's a of difference between the HMV scenario and some recent casualties, notably Jessops," he said.
"I understand the Exeter store performs reasonably well, it's in a good location in a very successful centre, so I'm reasonably optimistic.
"But it's another sign of just why we can't be complacent and that the challenges we are facing remain very real. Any store closure is disappointing."
On the Today Program this morning Evan Davis supplied some BBC balance and asked the question why retail customers should have any more rights than other creditors. The suggestion seemed to be that consumers have a duty to assess the commercial risk in retail supply.
Currently there is little information on whether the record companies have been paid or will be. According to the Guardian there was a deal at the beginning of 2012 to keep HMV trading in return for shares. The companies named in the article include Universal, Sony Music and Warner Brothers though it is stated that details were unclear. If these companies had shares were they able to influence directors? Were they aware of the financial situation? Did they know the policy on gift vouchers?
According to Cue Entertainment there are possible ways in which HMV shops could continue to trade.
Warner Home Video UK SVP and MD John Stanley said, “Everyone at Warner Bros. is working closely with HMV – and Blockbuster – to help them through this tough period and wish them success in finding support to keep their important brands trading. GAME is the ideal blueprint for a reshaped entertainment business that is evolving to fit today’s requirements in both physical and digital. We, therefore, hope to see Blockbuster and HMV in a similar position soon.”
So would Warner Home Video be at all concerned about the reputation of Warner Brothers Music?
If consumers are supposed to assess the credit risk in retail some disturbing conclusions follow. Print could go the same way as music. Should you buy a book token from Waterstones? Once HMV and Waterstones were part od the same company. The way in which finance is restructured could be a clue. Should you subscribe to a print publication? Is it possible that the Times or Guardian could cease publication in print? Should this decision stand there is an alarming scenario which will not be helpful to Exeter or any other retail centre.
I have had an email from Public Relations at Deloitte which answers some questions and raises others.
“Following our appointment, we are working closely with management and staff to stabilise the business in order to continue trading whilst actively seeking a purchaser for the business and assets. We appreciate the cooperation and support from the staff, customers, suppliers and landlords at what is clearly a difficult time.”
So nothing about gift vouchers here but if they really want to continue trading then goodwill could be an asset. Rapidly vanishing I would guess.
Certain HMV Group plc subsidiaries including HMV Guernsey Ltd, HMV Hong Kong Ltd, HMV Ireland Ltd, HMV Singapore Ltd and 7Digital Group remain outside of an insolvency process.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
We may need Evan Davis to explain what this means. Consumers have a new duty to work this out.
Probably more next week on the Wild Show, Thursday 10 -12. Any comment welcome. Facebook group search for Wild Show.