Music Chain Zavvi Closes 22 Stores in Britain

Ernst & Young, administrator of Britain's music, games and DVD chain Zavvi, has closed 22 of the firm's stores, resulting in 178 job losses, the British Broadcasting Corporation (BBC)

Ernst & Young, administrator of Britain's music, games and DVD chain Zavvi, has closed 22 of the firm's stores, resulting in 178 job losses, the British Broadcasting Corporation (BBC) reported Thursday.

The retailer's remaining 92 stores will stay open, with a sale of up to 50 percent off starting Friday, BBC said.

Zavvi, Britain's largest independent entertainment retailer established in 2007, has been seriously affected by the demise of Woolworths, whose 800-plus stores have just been closed.

Zavvi's main supplier was Woolworths' unit Entertainment UK (EUK), which went into administration in late November. Since then, the music chain has had difficulty in sourcing stock and has been forced to enter new trading arrangements.

Despite record consumer demand since Christmas, it is no longer possible to support continued trading across all of the Zavvi stores, said joint administrator of Ernst & Young, Tom Jack.

Unfortunately the current difficulties faced on the UK high street seem to be discouraging retailers from investing in a significant number of new stores, he added.

Ernst & Young has said it still aims to sell Zavvi as a going concern.

About a dozen British retailers have gone into administration since the end of last year as the economic situation worsens in the wake of the global credit crunch. Experts predict that more will follow suit as the economy claims more victims.

Source: American Shipper