Second time lucky for Hut Group

ONLINE entertainment retailer The Hut Group, which bought Zavvi from administrators, has revealed it was poised to buy the Woolworths name, before being out bid by Shop Direct.

Chief executive Matthew Moulding told TheBusinessDesk the rival bid was a surprise as he didn’t expect any other company to come in with the same business model for the iconic Woolworths brand.

“They have phenomenally deep pockets, and came in at the last minute,” said Mr Moulding, who added that he admired the home shopping giant’s online strategy.

“We realised at the back end of last year, with the high street retailers, that the whole face of things will change for retail,” he said.

Mr Moulding admitted that Zavvi “doesn’t have the same brand equity as Woolies” but said that was reflected in the price.

“Of course we factored in the damage caused  by the company going into administration. But everyone has heard of it and knows what it did,” he said.

Non-disclosure agreements mean the Northwich-based company cannot reveal how much was paid for the Zavvi brand, domain name and a database of 1 million customers that had used the website in the last 18 months.

“It tells us what they have bought, and put in their shopping baskets,” said Mr Moulding.

“We will develop the brand to take it into a different direction but fundamentally we have 1 million customers we can get back to and show the new proposition.”

The group will continue to trade TheHut.com website, with each brand targeting different demographics, and Mr Moulding expects each one to take around £10m in sales over the next year.

“Hut is a young brand, while Zavvi is more serious – it’s for the parents who would walk into a high street shop,” he said.