Helen Power
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CD and DVD retailer Zavvi went into administration this morning, putting another 3,400 jobs at risk as the crisis facing British retailers escalated today.
The Times revealed earlier this month that Ernst & Young had been appointed as standby administrator of the retailer, which was previously part of Sir Richard Branson’s Virgin Group.
Zavvi became embroiled in the collapse of Woolworths after its distribution arm EUK failed to deliver CDs, DVDs and computer games in the chaos of its own administration leaving Zavvi unable to stock shelves. It is the third major retailer to collapse in just 24 hours, putting an estimated 4,000 jobs at risk.
The Officers Club, the menswear retailer, was taken into new ownership today and Whittard of Chelsea was placed in administration last night.
The Officers Club had been struggling in the current economic downturn.
It was put up for sale last night by its administrators, PricewaterhouseCoopers.
David Charlton, chief executive of The Officers Club, has taken on 118 of the chain's 150 stores with his company, TimeC 1215. The deal will save 900 jobs, but hundreds more will be lost. The remaining 32 stores will close immediately.
Ian Green, from PwC in Leeds, which co-ordinated the sale, said: "The sale to TimeC 1215 Limited represents a significantly better result for the creditors of the companies than any other alternative."
The Officers Club began in Sunderland in the early 1990s, selling clothes sourced cheaply in Asia under its own-brand labels.
The business took off quickly, and after buy-outs, The Officers Club became Britain's biggest menswear-only retailer, with flagship outlets on Oxford Street in London, and in the North East.
But it encountered difficulties as it sought to migrate to the middle market from its position as a value retailer.
Whittard of Chelsea, the 122-year-old tea and coffee chain, went into administration yesterday. Its 138 stores will stay open at least until the end of the year after the company’s administrator, Ernst & Young, negotiated a sale to Epic Private Equity, a specialist investor that already owns the novelty retailer Past Times.
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If Zavvi was still Virgin they would of had a safety net, but nope.
Ross, Redditch,
With Zavvi often charging £50 for things that are £15 online, is their demise any wonder? I'm surprised it hasn't happened before now.
Tony, Islington, London, UK
Chief Executive buying it out!
This is the root of the current economic mess. In general the fat cat bosses are creaming too much money from companies. No wonder so many firms are in financial trouble.
Executive pay has got out of control and this is what fuelled house price inflation.
Fred, Moray, Scotland
I'm Store Manager of a Zavvi store. I believe that our company Directors & Management have tried incredibly hard to make a success of the business in a very tough and unforgiving market. Alot of good, hard working & committed people face the prospect of loosing jobs that they have been in for years.
Sue, Exeter, England
Adrian, you can still use the gift vouchers, we just cant sell them. i work at zavvi and were still accepting them as a use of payment.
Rose, hastings,
Retailing was never going to save the UK economy. It grew on debt and is now collapsing.
John Stobart, Oakham,
Well, my kids are now unsecured creditors. They've held £200 Zavvi vouchers since birthdays in June-July, and now that money has been de facto stolen from them.
Shame on any organisation that would countenance that; and at Christmas too.
Adrian Jack, Newcastle,
All comments here are apposite, especially Paul Lavin. Suppliers run out of stock, have price fluctuations and cut back hard on lines and volumes.
You must maintain several suppliers, even if some are higher priced / have worse terms. We would have failed ourselves save taking on extra suppliers.
Padraig, Perth, Australia
It's the guys in the virgin media concessions within Zavvi I'm worried about, they are not employed by Zavvi and if stores are forced to close these guys will be out of a job through no fault of their own or their employers. Not the best news for them the day before Xmas
ian, Coventry,
Zavvi's weakness by having only one supplier. Far too many companies have reduced suppliers in the quest for efficiency and lower cost yet ultimately it becomes their weakness. Business schools don't teach this but its essential you have a wide range of suppliers in order to protect your business
Paul Lavin, York, uk
No suprise there, what is the purpose of Zaavi when it is cheaper to buy online?
No one should buy a business off Richard Branson that doesn't have a monopoly like Heathrow landing slots or fixed trainlines. They never work.
Jon S, London,
The retail rents need to come down otherwise landlords will be left with high streets, retail parks and shopping centres full of empty shops and that will hardly get the economy going again will it?
Bruce Mcaaw, Grantham,
I agree with Ian in Brighton and can see a situation where the only chainstores left are the supermarkets. Increased internet shopping is good for courier services of course.
Paul, Coventry,
The sad truth above zavvi and previously Virgin Megastores is that they were a badly run business that had traded at a loss for the previous 5 years. Without Branson's cash to bail them out again this year they were always going to fail.
Andy, Nottingham,
The glaring truth is that the internest has done for mortar and brick stores. People can get same goods at a fraction of the cost and delivered, all at the click of a mouse. Don't be surprised to see many more High Street names disappear for ever - with all the ensuing unemployment! Dark days ahead!
Ian Dickson, Brighton, UK
not that much of a shock to see zavvi going down, - who will be next? cant see how are any of these retailers going to compete with the online stores such as amazon etc...
Neil, Norwich,
The trouble with 'pre-pack' administrations like this is it simply pushes the pain and unemployment further down the line to the unsecured creditors - the manufacturers and other suppliers. 900 jobs saved? And how many lost in the supply chain?
J Jenkins, York,