I only just noticed the message, but on December 24th, Zavvi announced that they were going into administration. This is the message that has been posted on their website at this page:

What has happened?

zavvi Group Limited
zavvi Retail Limited
Piccadilly Entertainment Stores Limited
VR Service Limited
Ablegrand Limited
Ablegrand 2 Limited
(together “zavvi UK” or “the Group”)

Tom Jack, Simon Allport and Alan Hudson of Ernst & Young LLP were today appointed Joint Administrators of zavvi UK. In addition, Tom Jack and Andrew Dann of Ernst & Young LLP were appointed as Joint Liquidators of zavvi Online (Guernsey) Ltd.

On 27 November 2008 Entertainment UK Limited (EUK), the zavvi UK’s main supplier, went into Administration. Since this time, the Group has been unable to source stock in the usual way and has been forced to enter into new trading arrangements. The Directors understand it is unlikely that EUK will be sold as a going concern and the Group has continued to experience significant difficulty in obtaining stock on favourable credit terms. In addition, the Group has recently experienced a material fall in revenues due to the abrupt downturn in consumer spending. As a result of the above factors the Group began to experience significant cash flow pressure and ultimately became unable to pay its debts as they fell due.

Purpose of Administration

The purpose of the Administration Order is to realise Group assets for the benefit of its creditors. The Joint Administrators intend to enable the Group to continue to trade whilst seeking a buyer for all or parts of the business.

Whilst in Administration, the Joint Administrators are ultimately responsible for zavvi UK. However, the existing management team will be responsible for the day-to-day running of the Group.

Business as usual

zavvi UK has not ceased to trade and customers will be able to continue shopping at zavvi stores across the UK and Ireland. Unfortunately, the zavvi website will not be taking any online orders and it will not be possible to redeem Gift Vouchers / Gift Cards in store. Arrangements regarding Refunds / Exchanges and Gift Vouchers / Gift Cards will be communicated separately.

Tom Jack
Joint Administrator

The Institute of Chartered Accountants in England and Wales authorises T A Jack and S Allport to act as Insolvency Practitioners under section 390(2)(a) of the Insolvency Act 1986 and the Association of Chartered Certified Accountants authorises A M Hudson to act as an Insolvency Practitioner under section 390(2)(a) of the Insolvency Act 1986.

The affairs, business and property of the Group are being managed by the Joint Administrators T A Jack, S Allport and A M Hudson. The Joint Administrators act as agents of the Company only and without personal liability.

So, basically the only important stuff is that Zavvi has stopped selling online, and any gift vouchers will not be valid in store and any refunds sound like they would be questionable. Obviously Richard Branson had the right idea when he sold on Virgin Megastore in the UK. But once Zavvi has gone, I guess HMV will be the lead in the market.

About the Author

Related Posts

No related posts.

Discussion