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Music Zone heading for administration

The private equity-owned retailer is close to selling off its assets after filing a notice of ‘intention to go into administration’ with Manchester Crown Court. The company’s backer, Lloyds Development Capital, is searching for a buyer to rescue the business.

The news comes almost exactly a year after Music Zone acquired 43 MVC stores from Woolworths. The chain now owns 104 outlets nationwide, including 20 in the South-East, but was recently forced to close its London Oxford Street outlet because of high rents.

Music Zone is a relative newcomer to games retail, having only begun selling console games in July. Between September and October, it increased in-store space dedicated to games by 50 per cent and started selling DS products, which it originally chose not to stock.

The firm began stocking hardware in November, when Managing Director Steve Oliver told MCV: “We put our market share on CDs and DVDs at between five and seven per cent – and we’re confident that we can get our share of the games market up to half those levels within six months.”

The news comes after Christmas troubles for other general entertainment retailers. In December, Woolworths CEO Trevor Bish-Jones warned investors that the combination of poor entertainment sales and bitter price wars would damage profits. HMV then also issued a profit warning shortly after.

Both companies will provide updates this month when they receive their Christmas trading figures.

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