Zavvi drops shutters in Edinburgh for the last time

Administrators handling the bankruptcy of the music, DVD and games retailer Zavvi—formerly Virgin Megastore—have closed a further 18 UK stores, including the last remaining Edinburgh branch.

The closures have resulted in 353 job losses within the company nation-wide, including 31 jobs lost in Scotland.

The demise in December of EUK, the former supplier for Woolworths and the main stock supplier for Zavvi, left the retailer unable to take customer orders. As a result, Zavvi went into administration on Christmas Eve 2008.

Tom Jack, joint administrator, said: "Despite having received in excess of 70 expressions of interest, we have not received any offers for the store portfolio as a whole. Consequently, with reducing stock levels we have had to manage the cost base of the business and close a further 18 stores."

By contrast, Simon Douglas, the managing director of Zavvi, has remained silent following the company’s failure.

22 stores were closed by the administrators, Ernst and Young, earlier this month, resulting in the initial loss of 178 jobs.

The recent closure of the Cameron Toll and Gyle shopping centre branches follows the closure in September of Zavvi's flagship Edinburgh store on Princes Street, due to a "downturn in business" prior to the firm's bankruptcy.

Ernst and Young have confirmed that 74 of Zavvi’s 114 UK stores will remain open.

HMV has agreed a deal with the administrators to buy profitable Zavvi stores, principally in locations where it does not currently have a store of its own.

The cost of HMV’s acquisition is anticipated to be approximately £2 million, including a purchase price of £700,000, plus the refit and re-branding of the outlets. The portfolio features nine stores in the UK and five in Ireland, and ought to save 269 jobs in total.

According to the administrators, the workers affected by the announcement will receive support from the insolvency service’s redundancy payment office and Job Centre Plus.

As a result of the closures, HMV's share price has risen as the company becomes the only surviving major high-street retailer of its kind.

Similarly, the video games retailer GAME attributed a rise in profits to the loss of competition from Zavvi and Woolworths.

GAME chief executive Lisa Morgan said: “A number of players will benefit including Argos, HMV and the supermarkets.”