BREAKING NEWS: Zavvi placed into administration
MUSIC, games and DVD chain Zavvi has gone into administration threatening 3,400 jobs, Ernst & Young has announced.
The troubled chain has been badly affected by the demise of Woolworths, which forced it to stop taking new orders via its website.
Zavvi’s main supplier is Woolworths’ unit Entertainment UK (EUK), which went into administration on November 27.
All of Zavvi’s stores should be open as normal on Boxing day, for its traditional post-Christmas sale.
The retailer 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.
It employs 2,363 permanent staff and 1,052 temporary staff.
Since Entertainment UK went into administration, Zavvi has had difficulties in sourcing stock and has been forced to enter new trading arrangements.
The administrators intend for Zavvi to continue trading with a view to selling all or part of the business.
Meanwhile, menswear chain The Officers Club has gone into administration but the jobs of 900 staff have been saved after the majority of the group’s stores were sold to a business run by its former chief executive.
The North East-based group, which is Britain’s largest menswear retailer with 150 stores, saw joint administrators Ian Green, Steve Ellis and Nick Reed from PricewaterhouseCoopers in Leeds appointed yesterday.
The joint administrators succeeded in selling 118 of the stores to TimeC 1215, a company backed by former Officers Club chief executive David Charlton, saving 900 jobs.
The remaining 32 stores have already been shut.
The Officers Club was started in the early 1990s in Sunderland importing cheap clothing from China and it became one of the biggest shop chains in the UK with
flagship stores in London’s Oxford Street and north-east England. The firm’s headquarters is at Cramlington, Northumberland and it also operates stores under the Petroleum brand.
The collapse of the Officers Club and Whittards of Chelsea – following Woolworths and MFI – came before Christmas, but insolvency experts are predicting that more than 10 more national retail chains could fail next month.
Retailers are vulnerable in January because they generally have more cash and less stock than at any other time of the year, so if creditors are going to force them into administration it is the best time to do so.
Mr Green, joint administrator and partner at PricewaterhouseCoopers in Leeds said: “We are delighted to be able to announce this sale, resulting in the preservation of over 900 jobs, particularly at this challenging time in the retail sector. The sale to TimeC 1215 represents a significantly better result for the creditors of the companies than any other alternative.”
Mr Charlton, director of TimeC 1215 said: “We are very pleased to be able to secure this deal and protect the employment of over 900 people in the stores and head office. We welcome the opportunity to take the business forward and look forward to a successful future.”
