Castle Trust's new Fortress Bonds pay market-leading interest rates, but aren't quite the same as a normal savings account.
Q&A: HMV administration
HMV has become the latest high street casualty as it announced last night it was calling in the administrators.
Britain’s last major high street music chain held talks with its banks over the weekend but failed to secure an emergency rescue package.
As a result, the company announced on Monday that it had ceased trading on its shares with immediate effect and would be appointing Deloitte as administrators.
The collapse comes just days after camera retailer Jessops suffered the same fate, indicating that the challenges being faced on the high street are far from over.
Here, we will explain what exactly has happened at HMV and what it will mean for you.
How did HMV end up in this position?
In truth, the demise of HMV has been a long time coming, as it was squeezed by online giant Amazon and supermarkets offering cut price music and DVDs.
Analysts claim the chain was simply too slow in getting involved in the digital music market, while it was always going to struggle to compete on a price basis against the might of Britain's supermarkets.
So HMV has collapsed – what happens next?
HMV issued a statement saying that “it is the intention of the administrators… to continue to trade whilst they seek a purchaser for the business."
So stores have opened as normal today. However, it will be a surprise if we don’t see at least some store closures in the future. At present, HMV has just under 240 stores across the UK and Ireland.
Are vouchers still valid?
HMV has confirmed it will not be accepting gift cards or vouchers. Unsurprisingly, the decision has outraged customers, many of whom will have been given them as Christmas presents but not yet redeemed them.
However, don’t throw your gift cards in the bin just yet. Ultimately it is up to the administrators to decide whether or not to honour them and, while HMV’s customers are obviously not their main concern, there’s a small chance they might change their mind.
You lose nothing by holding on to them for a little while longer.
And what about extended warranties?
If you’ve purchased an extended warranty through HMV for a device, the news is far more positive. This is because HMV's warranties are actually provided by a third party - Allianz Insurance - meaning they are still valid.
What does this mean for their staff?
HMV employs more than 4,000 people, who are all facing an uncertain future. As we mentioned earlier, it’s likely that we’ll see store closures and, with it, job losses. However, it must be stressed that nothing is certain at this early point.
Will HMV disappear from the high street altogether?
There’s a good chance it will remain. Although it has debts, analysts predict that around half of its stores could actually be run at a profit. What’s more, HMV is an instantly identifiable brand and that will no doubt attract potential buyers.
Expect to see someone willing make a bid for at least part of the business.
Will HMV hold a fire sale?
The store’s directors have said this will be a decision for the administrators.
related stories on msn
I think it's discusting that they do not honour gift cards they've had the cash for them. It's just a form of stealing from people. Even if someone jumps in to save them, people like myself would not use them because they have taken cash from me and all I have to show for it is a white plastic card which is of no use.
I think what people aren't realising is that this isn't solely because of illegal downloads, which is what the majority of Facebook statuses I've seen have been suggesting. This is because of technology progression. The move from CD to mp3 (whether legally or illegally acquired) is the same as the move from vinyl to CD. It's how the world is moving, and if people can buy a song from inside their home that takes up no space anywhere other than their mp3 device, against buying a piece of plastic they have to store...they're going to go with the CD. Same with DVDs. Would you rather have 400 DVDs cluttering up a room of your house, or have them all stored on your computer/iPad/iPod etc.? Of course the number of jobs that will be lost is terrible, and that is what's really happening here. But it's literally the way music and technology is moving forward. There will be people still buying CDs, of course, and in 30 years they'll be the same hipsters who today buy vinyls from record shops. So it's not like we're making CDs completely obsolete. But you can't battle technology progression just to save jobs.
cant belive they wont be accepting gift cards i have 2 of them worth £40 which i got given for christmas. ive always shoped in hmv for music. ive never downloaded music from the internet i like going into shops and pick what i want and have a good look round.
if hmv knew they were going into administration why take money off people.
"His Masters Voice", how very sad that this has happened, may be, just may be they will be saved, but with the age of downloads and internet buying how can they compete.
Another retailer bights the dust.
Wanda's right, I was sold a gift card at three fifteen on monday afternoon for my nephews birthday as i was unaware what was coming. By the time it had arrived in the post the next day they'd announced it was worthless, then later the same day took the money from my credit card for the gift card anyway whilst telling me in the store it couldn't be used!!! Surely it's dubious ground legally regardless of the company's predicament?
They should shut the stores that was loosing money early on would cut over heads cost.
I know the supermarkets can sell DVD at £10 or £14 they must buy them in bulk they
still make a profit on then,plus you can buy then on line theres load web site out there
cheaper tha HMV web site.
I am afrade it is about biss modle not resonding to its custermer.
Shame to see them go.
Another cash of the lack of lending from the banks it used to be the small company but they have found other ways of getting finance.
Big companys will now have to do the same
more on msn money
msn money poll
Do you support the new banking inquiry?
Thanks for being one of the first people to vote. Results will be available soon. Check for results
- Yes, I think the Big Four are too powerful and resistant to change
- 77 %No, I don’t believe it will result in real change that will benefit the consumer