HMV goes into administration – what you need to know

Accountancy firm KPMG has been appointed as administrator, and it says it will continue to trade the business while looking at options including a possible sale.

HMV currently has 128 stores and employs around 2,000 people, whose jobs may now sadly be at risk. It had previously filed for administration in 2013, but was bought by its current owner Hilco. 

HMV is the latest in a string of high street retailers to go into administration, including , and House of Fraser, which was later . 

Got a gift card? Use it quick

Gift cards are always a grey area when a firm goes into administration, as there's no obligation for the administrators or the buyer of a business to continue honouring them.

The good news if you've an HMV gift card is that KPMG says you WILL be able to use it while the business is still trading. However, there are no guarantees of how long this'll be, so if you have a gift card, spend it sooner rather than later.

No new gift cards will be sold from now on.

Can I return an item I've already bought?

KPMG has changed some of HMV's returns policies, as often happens when a store goes into administration - here's what it's now saying:

• If an item's faulty you CAN still get a refund.  A KPMG spokesperson told us HMV's policies for returning faulty items will remain the same for now. This means you'll be entitled to a full refund within 30 days of purchase, or a repair or replacement after that - regardless of whether you bought it in-store or online.

  How you can return faulty items depends on how you bought them - if you bought them in-store, you should return them in-store, and if you bought online you'll need to contact the e-commerce team. You can do this by emailing website.service@hmv.co.uk with your order number and details of the fault.  

• With other items, you can get an exchange. HMV's normal returns policies - for example, allowing you to get a refund for items bought online even if you've just changed your mind so long as you cancel your order within 14 days - no longer apply. However KPMG says if you have a non-faulty item you need to return (for example, because it's the wrong size) you can still get an exchange in-store.

  Again, this applies regardless of whether you bought in-store or online. It hasn't yet told us how long from purchase you can do this - we've asked and will update this story when we hear back, but it's best to do it ASAP. 

Outstanding online orders WILL be honoured 

If you order online and the company goes into administration before you receive your purchase, there are no guarantees you'll get it. However in this case KPMG says all outstanding HMV orders should be delivered. If an online order doesn't arrive, it says you should contact customer services as soon as possible. 

It also says that it's in discussions with third-party suppliers to "ensure continuity", and adds that HMV's online shop will continue to operate as normal.

The HMV website was still trading as of 2pm on Wednesday 2 January – but given the unpredictability of the situation, weigh up the risk very carefully before ordering a new item online. 

What about HMV's loyalty scheme?

The PureHMV loyalty scheme's website is currently "temporarily unavailable".

We've asked whether the scheme is still open, and if you're still able to use any accrued points, but KPMG says it's unable to answer this as PureHMV is not part of the administration. We'll continue to chase this and update this story when we know more. 

What does HMV say?

Paul McGowan, executive chairman of HMV and its owner Hilco, said: "During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year and, whilst HMV performed considerably better than that, such a deterioration in a key sector of the market is unsustainable.

"HMV has clearly not been insulated from the general malaise of the UK high street and has suffered the same challenges with business rates and other Government-centric policies which have led to increased fixed costs in the business.

"Business rates alone represent an annual cost to HMV in excess of £15 million. Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing UK retailers over the last 12 months on top of such a dramatic change in consumer behaviour in the entertainment market."

Additional reporting by the Press Association.