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BLACK FRIDAY: EUK administrator calls in £106m Zavvi debt

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BLACK FRIDAY: EUK administrator calls in £106m Zavvi debt

Deloitte appoints Ernst & Young at entertainment retailer

Just minutes after news of EUK's demise – and the loss of around 700 jobs – it has emerged that the distributor's administrator Deloitte has called in Ernst & Young to restructure Zavvi's management team in a bid to claw back some £106m owed to EUK.

Zavvi, which previously traded as Virgin Megastores, boasts some 125 stores across the UK. It has used EUK both as a distributor and its buying team and has been unable to fully stock its stores since EUK went into administration.

With Ernst & Young in place, EUK is aiming to claim back the £106m that Zavvi owes the distributor. However, according to The Tmes, Ernst & Young will become the administrator at the entertainment retailer if it fails to pay back its debt.

The Times also reveals that Zavvi is just one of a number of major customers that owes money to EUK, claiming that both Tesco and Sainsbury's owes around £25 million each.

A statement from Zavvi is expected shortly.

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Source: The Times

Tags: euk

What about publishers ?

posted by S Dec 12, 2008 at 1:18 pm
1
S

What about E~UK handing over the money they owe us as a publisher ? Or give us our stock back ?

I doubt that will happen yet they can put Zavvi under the spotlight for what they owe EUK !

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Re: What about publishers ?

posted by Bob Dec 12, 2008 at 1:30 pm
2
Bob

Fair enough S

But surely you can see that they need to pull in funds that is owed to them before thy can pay their debts. If that was'nt the case they would not be in adminstration!!!!!

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Re: Re: What about publishers ?

posted by Zildjian Dec 12, 2008 at 2:02 pm
3

"Cough it up, pay the piper... Gimme it!"

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Re: Re: Indie Revolution

posted by Indie R.I.P no more Dec 12, 2008 at 2:06 pm
4
Indie R.I.P no more

I bet all you Publishers & middle Distribution now wish you had hadn't put your soul into the big High Street Stores & Supermarkets and had more faith in INDIES, who seem to be (as a collective) a much safer and viable option these days.

Have faith we are still here and willing to handle your products with utmost prefessionalism and respect !!!!!!

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Re: Re: Re: Indie Revolution

posted by Onehunglow Dec 12, 2008 at 2:30 pm
5

Its shocking that they are going out of business when they are owed millions. Someone was very lazy in credit control

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Re: Indie Revolution

posted by Drummond Dec 12, 2008 at 2:46 pm
6
Drummond

Yes, WE know it is time for a revolution, but the publishers devolved any responsibility for the indies to the exclusive distributors. Until the exclusive model is abandoned, they are happy to manage us into oblivion, then they too can close up shop, which some are doing already.

We need a major sea change to the distribution model and more than just lip service from the publishers. But they have new fish to fry and having picked up and dumped retail and then picked up and dumped online retail, they are already distracted by the new shiny thing that is downloadable content.

When that fails, as it will for most, maybe they will want look again at the indies, who will all be but gone by then.

The trouble with this industry is they have no concept of servicing more than one sector at a time and really exposes their reliance on 'suits', who have no flair for or understanding of retail.

One thing the publishers need now are alternatives and a reserve retail force to fall back on, to get them through what is going to be a rough patch. The question is, do they have the guts to roll the clock back?

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re Indie Revolution

posted by games direct uk Dec 12, 2008 at 2:58 pm
7
games direct uk

all your eggs in one basket seems to ring a bell !!!
the indies will win out this battle, the big guys are falling one by one. you cant keep selling cut price stock with big overheads and make a profit on loss leaders. its great to be able to sell a ds lite and a game for £99.99 ( fat chris hmmm ) but if you are not making a profit whats the point !i think next year we will see this all calm down and the fittest will survive, my messgae to you is if you are a indie hang on in there cos next year you will see a big change

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Re: re Indie Revolution

posted by Anon Dec 12, 2008 at 3:54 pm
8
Anon

I represent what would be classed as a small publisher at this point in time but I have always classed the indies as just as important as the multiples. We have provided them with equal pricing to that offered to the bigger chains and in return our products have been backed to the hilt by the indies and some of the quantities that they have produced for PC titles is a credit to them. Wherever I go I will always look after the indies because deep down they know their stuff, they are passionate and if you look after them they deliver.

I hope you all have a great Christmas with the tills ringing constantly

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Re: re Indie Revolution

posted by Theo Sorearse Dec 12, 2008 at 3:57 pm
9
Theo Sorearse

The Supermarkets will continue to offer silly prices. That won't change.

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Re: Re: re Indie Revolution

posted by Zildjian Dec 12, 2008 at 4:18 pm
10

Yeah, because they can afford to do so...

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Re: Re: Re: re Indie Revolution

posted by Burner Dec 12, 2008 at 6:06 pm
11
Burner

Why did EUK let Zavvi have a debt so large? This is why they have failed so spectacularly as a business and probably why other distributors are in crisis. The business I am in has been in similar trouble - in order to pay our suppliers, we have had to be tough with customer payments and this includes reducing multiples payment terms.

maybe there will be a change in how and who the industry supports but I don't think the Indies will fit into this change.
Not yet anyway.

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