LONDON (CelebrityAccess MediaWire) — Creditors of the Zavvi retail chain, formerly Virgin Megastores, have brought in an emergency restructuring team of auditors from Ernst & Young as an apparent last ditch effort to save the retailer from entering receivership, The Times has reported.
The chain, which specializes in movies, music and video games, was purchased away from Richard Branson's Virgin Group when the firm decided to spin off most of its Virgin Megastores in the early-mid 2000s.
Since then it has struggled to reach profitability and things went from bad to worse when their supplier, Entertainment UK went into receivership, forcing Zavvi to suspend online orders and refund money outstanding orders to customers. According to the Times, Zavvi is currently grappling with outstanding debt of £106 million owed to Entertainment UK.
In September, the company had announced intentions to re-orient their focus from music to video games, which had proven to be their strongest segment and to offer an online music service to challenge Napster. It
The company employs approximately 2,500 people across the UK & Ireland. – CelebrityAccess Staff Writers