Network now...NEWS
Zavvi May Still Be Saved
Zavvi’s administrators claim that there are still a number of interested parties looking to buy the business.
Zavvi – the UK's largest independent retailer of games, music and film goods – fell into administration on Christmas Eve. The retailer’s demise was largely a knock-on effect from the fall of Woolworths and its wholesale distributor EUK.
Ever since EUK fell into administration late in November (before officially closing in mid-December), Zavvi has experienced difficulties in securing stock. Simon Douglas, founder of the retailer, said at the time: “We have done all that is possible to keep the business trading, but the problems encountered with EUK, and particularly its recent failure, have been too much for the business to cope with.”
The group’s 125 stores remain open, for now, while the company’s online shop has been axed. Over half of the firm’s head-office staff have been made redundant, while the fate of Zavvi’s 3,400 workforce hangs in the balance.
Yet a spokeswoman for administrators Ernst & Young claims that there is still a notable level of interest in buying the group as a whole or in parts. “We are continuing to trade the business,” she tells Edge, adding that the group is still receiving interest in buying the business and its stores.
The spokeswoman couldn’t specify which businesses she claims have shown an interest, nor would she specify which business sector the parties reside in.
In regards to the administrator’s outlined plan for the weeks and months ahead to keep the business as a going concern, the spokesperson simply claimed that “it’s too early to say.”
Back in September 2007, Virgin Group’s Richard Branson sold his shares in Zavvi for an undisclosed sum.
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"The retailer’s demise was largely a knock-on effect from the fall of Woolworths and its wholesale distributor EUK. "
We keep seeing this story being thrown around, while the press rarely reports on the fact that Zavvi owed UEK around £100m - which is a quater of the £400m debt that EUK had. If anything, Zavvi was a major contributing factor to EUK doing down, not the other way around.
As Zavvi announced themselves, they had to go into administration because they are 'experience significant difficulty in obtaining stock on favourable credit terms' (take from the Zavvi website) - which basically means they are a credit risk and no supplier wants to risk having their invoices unpaid by Zavvi.
As for the Zavvi 'clearance' sale, they don't seem to be trying too hard to clear stock. There are limited items with any real discount and even with the 10% off everything, most items are still much cheaper to buy online.
Although I agree that Zavvi have not been very good since changing from Virgin Megastores, but we really do need them around to keep the likes of HMV honest!
EUK went down because of Woolworth... Zavvi then got dragged into the mess due to EUK requiring the money owed straight away instead of 60days, add to not having the ability to buy stock, Zavvi were in all kinds of trouble. Imagine your bank had given you a house loan over several years requiring the money back over night... and you'll get the idea. 100million pounds may sound like a lot... but it isn't a massive amount of money to owe... 120+ store buying in stock... the Northampton branch had approx 500 copies of Mama Mia, and about the same of Dark Knight, times that by the amount of stores and even at a few pounds each dvd, you are at millions of pounds owed, it's a juggling act that isn't made easy with one hand tied behind your back, and no help from anyone... Give Zavvi a break, as it's not just a faceless company... people work there.... and this economic mess won't clear up with everyone out of work and people cheering as more companies bite the dust...
Totally agree - competition in the high street is a huge boon for consumers, and with Woolworths and Zavvi both going under it'll only be the online stores keeping HMV in check. I hope Zavvi finds a buyer to keep them going. Although I must admit that even at their current sale prices I couldn't find anything I wanted to buy...
On the relationship with EUK - I haven't read much on the subject, but from what you said here, surely if Zavvi owed EUK that much money then EUK's administrators would be looking to recover the cash from Zavvi as quickly as possible? The prospect of the administrators sending in the bailiffs (metaphorically speaking) might be a big factor in Zavvi's creditors being unwilling to lend to them.
Just in case there is any doubt, I found the article that puts a figure on the Zavvi to EUK debt over at The Times. The figure seems to be £106m.
http://business.timesonline.co.uk/tol/business/industry_sectors/retailin...
Rumors from inside Zavvi are that the debt has been reduced to 40m with over half if not more already paid off...
Their stuff is over priced and their selection is rubbish. It'll be best if they go away.
Actually, their stuff is no more expensive than Games/HMV's. People are about to loose jobs and all you care about is saving a few quid.
[Edited with warning. Comments section is not for personal attacks - Rob]
I just hope people are as thoughtless and uncaring if you ever find yourself in a job that might be axed.
at Zavvi there are many zavvi staff who work like mad to keep the place going in a hope that things will turn out for the best.
If all we ever have is hmv and play dot com, you'll soon find that their price will start to look equally over priced.... besides Zavvi is no more expensive than hmv... so how about a little support, or is it great to kick people while they are down.
zavvi was always crappi. Since Virgin turned to Zavvi is was a right old joke. It seemed to stock hardly anything.
Hmm.. hopefully they've not lost the goodwill of customers with their recent "not accepting vouchers" debacle.