Music chain Zavvi forced into administration

UK music retailer Zavvi has gone into administration threatening 3,400 jobs.

The chain, which was formed in 2007 after a management buyout of Virgin Megastores, has been affected by the collapse of Woolworths. Zavvi's main supplier is Woolworths' distribution arm Entertainment UK (EUK), which went into administration on 27 November.

This meant it became impossible for Zavvi to source stock and it had to stop taking orders via its website.

The firm said administration was necessary as it looked unlikely that this situation would change for the better.

There are 125 Zavvi stores in the UK with 11 in Ireland. At present, Zavvi Ireland is not subject to any formal insolvency proceedings.

A statement from Zavvi's administrators Ernst And Young has said that stores remain open and trading as normal.

However, customers with vouchers from the retail giant are out of luck.

These will not be redeemed in store, with those purchased after November 27 will be subject to refund by post. Those brought before the November date can try to make a claim for the money, agin by sending in their gift cards.

Ernst And Young have said it is too early to say how many stores will close and how many, if any, will be saved and sold on.

"This will depend on the ongoing trading results of zavvi and any potential sale of the Group's business and assets," said Tom Jack of Ernst And Young. "Stores in Liverpool (Clayton Street), Southampton and Aberdeen Bon Accord are expected to close on 30 December 2008,1 December 2008 and 13 January 2008 respectively, as planned by the Group prior to the Administration."

Zavvi is the latest victim of the slump in High Street sales that has seen the administrators called in at tea and coffee specialist Whittards and menswear chain The Officers Club.

For more information on the impact for customers go to Zavvi.co.uk.