Scores of shoppers queued outside the Leeds HMV branch yesterday but were left frustrated after being told they could not redeem gift vouchers.
Many had turned up to try and spend their vouchers, many of them Christmas gifts, which they had kept for the New Year.
But to their dismay they were told by staff that they were not valid as a closure notice was put up in the store’s windows on Lands Lane.
HMV’s closure, which has lost its battle for survival, is seen as a devastating blow for the British high street and for its 4,000 staff nationally.
The five stores across West Yorkshire, including venues at the White Rose Centre, Bradford, Wakefield and Huddersfield, with an estimated 90 staff, will remain open as the appointment of Deloitte as administrator to the 92-year-old business.
It comes after the failures of Jessops and Comet caused the closure of 422 UK stores and loss of more than 8,000 jobs.
HMV’s 238 outlets will remain open while Deloitte attempts to find a buyer for some or all of the business, although it is likely that there will be widespread store closures as a result of the collapse.
The company’s administration also means that vouchers and gift cards, many of which were given as Christmas presents, are worthless.
Paul Kirby, of Potternewton, Leeds, clutching a £90 gift card, told the YEP: “I am sad it is the end of an era as I’ve always been interested in music and bought it for decades but it seems unfair now not to allow vouchers to be spent while the store remains open for trade.”
Shoppers had been given a customer services telephone number by staff, who were clearly shell-shocked. Consumer experts advised if the chain was saved, vouchers may still be valid.
Squeezed by internet retailers and supermarkets, whose scale has enabled them to offer CDs and DVDs at cheaper prices, HMV’s boss Trevor Moore warned before Christmas that the entertainment group was in trouble.
Mr Moore said the group would fail to meet expectations for the year to April and that it would breach the terms of its loan agreements later this month.
Suppliers including Universal Music came to HMV’s rescue in January 2011 with a deal which helped the retailer shed some of its huge debt pile.
Clare Francis, personal finance spokeswoman at MoneySupermarket.com, said: “Buying gift vouchers for a firm that then goes bust could leave you in a tricky situation. Firms often continue trading even though they’re insolvent as the administrators seek to shift unsold stock and it is at their discretion as to whether or not gift vouchers are still accepted.
“HMV has announced that it will cease accepting and issuing gift vouchers, leaving it very unlikely that you will get any money back. Instead, you will be added to the long list of creditors and given the values involved you’re not likely to be near the top of that list.
“If HMV were to cease trading, and your voucher is worth £100 or more and was paid for using a credit card there is a chance that they may be able to get the money back from the credit card provider under Section 75 of the Consumer Credit Act.”
Independents tell of ‘great shame for trade’
Leeds has a handful of independent music stores which have managed to survive for decades, despite a surge in on-line trade.
Among them are Crash Records, Jumbo Records and Relics Records, which specialises in buying and selling vinyl.
Crash Records opened in the city in 1985, moving to its home on The Headrow in 1987.
Owner Ian De-Whytell, said: “I suspect they will find a way of helping to keep the shops open, especially some of the larger stores.”
Mr De-Whytell, who worked for HMV for four years in the 1980s and then was a music rep for 12 years and would regularly call in at various HMV stores. He said: “HMV has been a big part of my life and know many of the staff over the years. The news is a great shame, really, for the music industry. I really do hope some good will come of it.”
He said Crash had managed to survive due to its speciality and independence. The popular store sells gig tickets as well as vinyl, and hard to get hold of cds.
“I think HMV just grew too big and as CD sales declined they filled the rest of the shop with other goods and products unrelated to music.
“The staff in HMV are passionate about music, that is consistent and they are the ones I really feel for.”
John Formaniuk, of Relics Records, Upper Briggate, now in its 23rd year, said the news came as no surprise: “The signs have been there for ages and everyone in the trade knew it was losing direction. In my opinion selling football strips, does not mix well with music. The Leeds store is a huge area over two floors. Often they were down on CD stock and bizarrely went into the second hand-market some time ago.
“Their size and buying power should have meant that discs in store were priced £8.99 and not £12.99 and available for much less on the net.”