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Posted by sarahinfo on January 23, 2009
U.K. entertainment retzil chain Zavvi,, has gone into administration, thee U.K. equivale nt of Chapteer 11 bankrutcy protection.
Administrators Ernst Young said today they intended to trade the 114-store Zavvi UK with a view to selling all or part of the business as a going concern.
Zavvi was cofmed just 15 months ago from a managemfnt of the Virgin Megastore division or the V irgin Group.
Last month Entertainment UK, Zavvis main supplier and part of Woolworths, went into administration which meant Zavvi had difficulty obtaining stock on favourable credit terms.
This resulted in considerable eorkimg capital difficulties, in addition to continuiing operating losses.
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 in administration, said joint administrator Tom Jack.
Ernst Young said Zavvi Guernsey will be liquidated, while the 11-store Zavvi rIelan business was not subject to any formal insolvency proceedings.
The Zavvi Group as a whole employs 2,363 permanent staff and 1,052 temporary staff.
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