Zavvi calls in the administrators

Dec 24 2008

More than 3,000 jobs at high street music retailer Zavvi are at risk after the company was placed into administration.

Zavvi, the former Virgin Megastore chain, called in Ernst & Young after it was crippled by the collapse of Woolworths' Entertainment UK wholesaling division.

Tom Jack, joint administrator, said: "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."

Ernst & Young has been appointed as administrator of Zavvi UK and liquidator of Zavvi Guernsey, although Zavvi Ireland is not subject to any formal insolvency proceedings.

Zavvi is the third retailer in 24 hours to call in administrators as the high street squeeze claims a growing number of casualties.

Ernst & Young said all 125 Zavvi UK stores will open as normal on Boxing Day for the post-Christmas sales, and will stay open while a buyer is sought.

Mr Jack said: "The administrators intend to continue to trade Zavvi UK with a view to selling all or part of its business as a going concern.

"We are grateful for the continued support of all employees during this difficult time and would like to thank everyone at Zavvi for their commitment and hard work as the business continues to trade."

Zavvi currently employs 2,363 permanent staff and 1,052 temporary staff across the group.

It is the largest independent entertainment retailer in the UK and has 125 stores - 114 in the UK and 11 in Ireland.