HMV closing (again)

EnterNow wrote: »

Yeah I probably should have paid more attention in Business Studies man. As clear as you have laid it out, I still see it as they have gotten money off the public, given them in return a worthless piece of card, & used the publics money for their own debts, in essence, free money.

I'll prob never understand it in a business sense at this rate

I think the misconception here is that the money is just 'resting', in the words of a great priest, in a till somewhere. That money will actually only stay in a till for mere hours, if not minutes, and then becomes part of the general cashflow of the company that could be redirected in any number of directions - staff, suppliers, anything else cited above. It's the same with a bank - your savings aren't just sitting in a vault in the back of your local bank. They're being invested and spent in the hope of making a return (interest). When a business is going good, that's all fine - there is enough money resting in till to ensure every creditor is happy. When not, well then it becomes a problem, and the business owners will take the side they think will be more beneficial long-term.

There's also the whole 'run on the bank' aspect to this, to continue the analogy. As we have seen over the last few days, everyone who has a voucher from the last six months wants to cash it in ASAP (with good cause, of course). Most stores probably work on the assumption that vouchers will be cashed in over a longer period of time (if at all - many just straight-up expire), and use the 'credit' accordingly. A panicked rush is probably not something they can handle, especially with all their current problems to boot - adding insult to injury, if you will. Similarly, a bank could handle a customer or two a day coming in to claim their savings. They'd struggle if every customer suddenly showed up.

Again, don't for a second think I'm not sympathetic - I am, and if the current speculation that HMV Ireland is a separate entity is true, then its considerably more outrageous and unacceptable than it would be under administration. No excuse, if you will.

Also have to admit surprise the Grafton St branch is closed already. Certainly didn't expect the repercussions to be felt that quickly. Although going by the reports of what staff and customers had to put up with yesterday, perhaps inevitable.