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Gift vouchers already being turned down. Hopes remain that retailer will be rescued

HMV set for administration

Entertainment retailer HMV is expected to go into administration this morning after filing notice late last night.

HMV’s shares have been suspended from trading on the London Stock Exchange with immediate effect. 

This morning it has emerged that gift vouchers are no longer being accepted by the retailer.

It’s yet another sad tale for the High Street – this time with 239 stores and up to 4,000 jobs at risk.

It is understood that administrators Deloitte will keep all stores open while it searches for a potential buyer.

Here’s HMV’s full statement:

On 13 December 2012, the Company announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.

Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, 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, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect.

The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.

It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.

The Company’s ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect.

More to come.

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