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Zavvi placed into administration

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Lt-DavidW    2
Music, games and DVD chain Zavvi has gone into administration, Ernst & Young has announced, threatening 3,400 jobs.

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 27 November.

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.

Zavvi Ireland is not currently subject to any formal insolvency proceedings.

Problems at Woolworths

Since Entertainment UK went into administration, Zavvi has had difficulties in sourcing stock and has been forced to enter new trading arrangements.

"This has resulted in considerable working capital difficulties," an Ernst & Young statement said.

"Since EUK went into administration, and perhaps before, the impact of problems at EUK on the Zavvi group has been significant.

"Minimal deliveries, no returns and worse trading terms are just some of the areas impacted," said joint administrator Tom Jack.

"In the absence of a buyer for EUK, and with dire trading conditions on the High Street, the Zavvi group has seen a material fall in sales and the directors have now been forced to place parts of the group into administration," he added.

The administrators intend for Zavvi to continue trading with a view to selling all or part of the business.

The group's founding partners Simon Douglas and Steve Peckham said: "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 Zavvi group is the UK's largest independent entertainment retailer with 125 stores, 11 of which are in Ireland.

Key facts about Zavvi

Formed in 2007 after a management buy-out of Virgin Megastores

The first Virgin Megastore opened in 1971

The largest entertainment retailer in the UK

It has 125 stores, including 11 in Ireland

The group employs 3415 people

Source: BBC News

This is sad, their online store was extremely competitive and cheaper than Amazon and Play for a lot of things.

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Jeremy Kyle    0

Bad times

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-Vivicidal-    4

I liked Zavvi, but I won't miss Woolworths.

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jelli    7

Was hoping this wouldn't happen, however will be looking out for the bargains going. If Woolworths crowds were bad I dread to think what the crowds will be like when the sales go up.

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Nicholas-c    37

dang, i bought 6 blu rays from there last week with their 3 for 2 offer :p

Oh well, Next!

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Damo R.    29,658

I liked Zavvi they had some good stuff in there and the best priced imo around here for dvd's but this is going to be the start of many more I feel.

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McDave    9

I remember when MVC went bust years ago, they were selling everything dirt cheap. The store near me emptied in 2 days (was not small shop either) that is alot of sales.

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Zebedee    0
I liked Zavvi, but I won't miss Woolworths.

I don't know, it's going to be weird not seeing Woolworths around on the streets.

But I'm going to miss Zavvi, it's where all my music/games/films have come from over the past year or so.

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LewisBraid    0

I'll miss woolworths but Zavvi just seemed to me like a bad rip off of play.com - but in highstreet form obv ;). Wont miss it.

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-T-    671

I wonder if Woolworths Australia is gonna be affected at any point

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jakem1    1,610
I wonder if Woolworths Australia is gonna be affected at any point

AFAIK Woolworths Australia is a different company. Also, Woolworths Australia is a supermarket chain whereas Woolworth's UK is more like KMart.

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Sandor    436

virgin saw this coming last year when they sold it off.

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