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Zavvi calls in 'restructuring team' as Woolworths fallout spreads

Music and DVD store is unable to stock its stores or sell music online

December 12, 2008 | 13 Comments
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Music and DVD store Zavvi has called in restructuring team Ernst & Young after its distributor, Entertainment UK, went into administration.

Zavvi was forced to suspend online trading after Entertainment UK, a subsidiary of Woolworths, went into administration on November 27.

Deloitte, the administrators of Entertainment UK, have moved Ernst & Young in to aid Zavvi, with the blessing of the music retailer's management team.

Ernst & Young are understood to be on stand-by if Zavvi cannot repay its debt of £106 million to Entertainment UK, reports The Times.

If that were to happen, 2,500 Zavvi staff would see their jobs threatened.

If Zavvi, which formerly traded under the Virgin brand were to enter into administration too, then former owner the Virgin Group (which sold the business last year) could be liable because it guaranteed Zavvi's orders with Entertainment UK.

In a separate move today (December 12), BBC News reports that 700 staff from Entertainment UK's head offices and distribution centres in Middlesex have been laid off.

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Comments (13)

Add a comment

littlezazz

Dec 12, 2008

hopefully this'll give the small record shops a chance instead of zavvi and HMV getting all the business

wellduhobviously

Dec 13, 2008

Christ, nothing is safe anymore.

Ickle Nicci

Dec 13, 2008

hmm unlikely, with Pinnacle Distribution closing down as well I bet the independent shops are in just as much trouble.

Lord Dainippon

Dec 13, 2008

I doubt it will give the small record shops a chance as HMV will still steamroll over them with their neverending stocks of generic customer buying generic music. Just blame most of the people in the country with their uneducated tastes of music for that.Besides, they have Universal as their stock supplier so they're not exactly short of rubbish in their warehouses.As for Zavvi, they're my bread & butter in an indirect sort of way and I don't want them going down in the same ship as EUK.

Ihatetheeagles

Dec 13, 2008

littlezazz, why do you care so much about the plight of the small record store exactly? This news means HMV shall rightly prevail as the superior record retailer.

Willy Plonka

Dec 13, 2008

Why, in gods name, would anyone, want to go into Zavvi or HMV and buy a DVD for Â£16.99, when you can get it on Amazon for fucking Â£9.99? Its not a question of distributors going bust, its a question of ripping the shit out of the Great British Public, and now we have the upper hand for the first time ever. So fuck you and your large chains, long live the independents.

citizenidiot

Dec 13, 2008

The problem with Zavvi and major music chains is that they have forgot why people go to music stores. Storing a zillion copies of the latest Take That album is not going to boost sales as people who buy those albums are more likely to buy it during their normal shop at Asda or Tescos. People go to music stores for variety and to listen to music they have not heard before. Most people are willing to pay the extra Â£1 to pick up a CD in store if they come across a more obscure gem.

nme_yorkshire

Dec 13, 2008

zavvi, ffs, whos guna buy from zavvi when they are constatly more expensive by at least Â£3 on a cd, when you can get free delivery at about Â£7 from Play.com and HMV.com , even Tesco can beat there prices, it doesnt make a good store, just cos the charge over the odds !sorry for the ppl employed by zavvi, but the store is a waste of time, ive never bought anything from zavvi !!

mickyjesus

Dec 13, 2008

i agree littlezazz and maybe become the building blocks for new small independent shops to grow and florish once again bring back alan fearnleys!

wobblenut

Dec 13, 2008

What small record shops? They've all gone!!!

gergbot

Dec 14, 2008

Great news. Firstly because in my town of Witney (heard of it?!) we have a small record shop called 'Rapture'. This is one of the top 10 record shops in the country, and now thanks to big name companies going bust, stores like Rapture, and all the other little ones in Soho get a greater chance in competing. Secondly, Zavvi recently rejected a job application from me.