HMV Enters Administration, No Longer Accepts Gift Vouchers

Last night British high street retailer HMV announced that it was entering administration with financial services firm Deloitte being appointed as the administrator. The company has ceased trading its shares on the London Stock Exchange. And while shops will remain open for the near future, they will no longer accept gift vouchers.

"The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection," explained HMV (in a statement issued to the BBC). And the board, 'understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business."

HMV is one of Britain's oldest retailers, first opening its doors in 1921. But it has struggled to stay ahead in the world of online retailing, facing stiff competition from the likes of Amazon and iTunes. In recent years, it's diversified to survive, selling more and more technology products, books, clothing and of course, video games.

The company has been in a financial crisis for just over a year, and on December 13 its share price fell dramatically after it was warned it was in danger of breaching its bank loan agreements.

Maureen Hinton, an analyst from Verdict Research, said that things could have been different for the retailer. "If it had gone online 10, 15 years ago, it's got a very strong brand name, it could have built up a real presence," she told the BBC. "But at the moment if we think online you just think Amazon." Meanwhile, Neil Saunders – the managing director of retail analyst Conlumino – said that the brand name is still valuable, but the current business model is dead.

HMV currently operates 239 stores in the UK, employing 4350 members of staff. Shops will remain open while the company seeks potential buyers. But it has said that it will no longer be accept gift vouchers.

Daniel is IGN's UK Staff Writer. You can be part of the world's worst cult by following him on IGN and Twitter.

Source : ign[dot]com