Zavvi, the DVD and CD retailer, has gone into administration following the demise of Entertainment UK, the wholesale division of Woolworths Group, which went into administration on 27th November 2008.
The chain was formed after the management buyout of Virgin Megastores in 2007 and trades from 125 stores across the UK employing 2,363 permanent and 1,052 temporary staff.
Tom Jack, joint administrator of Ernst & Young LLP, said: “Since E.UK went into administration, and perhaps before, the impact of problems at E.UK on the Zavvi Group has been significant. Minimal deliveries, no returns and worse trading terms are just some of the areas impacted.
“In the absence of a buyer for E.UK, 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.”
The administrators intend to continue to trade Zavvi with a view to selling all or part of the business.
Simon Douglas and Steve Peckham, the group’s founders, added: “We would like to thank all of our employees for their commitment and support since the launch of Zavvi. We have done all that is possible to keep the business trading, but the problems encountered with E.UK, and particularly its recent failure, has been too much for the business to cope with.”