Zavvi placed into administration

Scottland said:
We should open a book on who's next of the big retailers to fall; HMV, DSG, WH-Smith etc
Click to expand...

I reckon Smiths is going down next. When you see their adverts practically begging you to buy inane drivel in which nobody has any interest whatsoever such as biographies of Alan Carr, Dawn French and Parkinson you know they have problems.
 
Steve2000 said:
I reckon Smiths is going down next
Click to expand...

Smiths is, little known to most, also the UK's largest independant distrubutor of newspapers and magazines. This is more profitable than its retail arm.

As for Zavvi, it's interesting to see people bleating about WHO COULD BE NEXT and how shocked they are, and how the times are obviously terrible.

Hang on a second.

Zavvi, like Woolworths, have been in trouble since long before all this 'current economic climate' stuff kicked off. Woolworths have been on the brink for years and as for Zavvi, why do you think Branson disposed of the business over a year ago? Because it was highly profitable and had good growth prospects?

Bzzzt - guess again.

So, Zavvi was already not exactly great. Then consider the next problem - businesses run on credit. Zavvi buys, or bought, most of its stock from E-UK (Who were owned by Woolworths) probably on 90-110 day net terms. No cash required for that - they could get the stock in, turn it over, and pay the creditors. Thats how most businesses work. But then E-UK went bust, Zavvi had no supplier, and negotiating terms with new suppliers meant they required cash rather than credit terms in order to buy stock. This put a HUGE strain on Zavvi's working capital and without any working capital... hello administrators.
 
Last edited:
Hxc said:
Brandson is probably quite pleased right now.
Click to expand...

Pleased that you spelt his name wrong?
:p

Nah, he probably is, quite surprised at the news though, suppose it was inevitable really. Wouldn't be surprised if most chains do this over the next few months, soon the high street will be nothing but banks, and in-debt ones at that :p
 
Not surprised, as soon as I saw Virgin has sold it I said to my mate "they wont last long"

Kudos to Branson for selling when he did!
 
I liked Zavvi, not the cheapest but when buying items on my virgin credit card I automatically got 10% off. Nice touch. I got an Xbox 360 Elite for £170 from Zavvi the other day as well which was a bargain :)

Why does everyone on this forum believe they are an analyst? Makes me laugh :)
 
[TW]Fox;13147379 said:
As for Zavvi, it's interesting to see people bleating about WHO COULD BE NEXT and how shocked they are, and how the times are obviously terrible.

Hang on a second.

Zavvi, like Woolworths, have been in trouble since long before all this 'current economic climate' stuff kicked off. Woolworths have been on the brink for years and as for Zavvi, why do you think Branson disposed of the business over a year ago? Because it was highly profitable and had good growth prospects?
Click to expand...

Excellent point, couldnt agree more, but for the masses who believe the media hype this is just going to scare people even more! :rolleyes:
 
Fox is right, Smiths are strong as far as I know. Also around here the Smiths stores have taken over from the closed Post Office branches and this is pulling in load of the new customers for them.

I think we will see other chains go in the new year though. Banks are happy to keep them going as this is their pay day when they should be making their years profits. However its a double edged sword as that means come January they will have more cash and less stock than any other time and this would be perfect timing for debts to be chased and a few more national chains going to the wall.
 
Smiths is, little known to most, also the UK's largest independant distrubutor of newspapers and magazines. This is more profitable than its retail arm.
Click to expand...

I didn't know that. How enlightening.

Adam said:
Why does everyone on this forum believe they are an analyst? Makes me laugh :)
Click to expand...

So people give their opinions and immediately they think they're analysts? :confused:

Are you an analyst of this forum's users?
 
Oh - and it was clearly obvious Zavvi had cashflow problems. Have you seen the prices they were selling video games consoles for? A good £30ish off the RRP. This is below cost, and units on their own as well, so negative margin.

Why? Because they desperately needed working capital - any cash is good when your business is cash poor even if its cash thats a lower amount than the stock cost you in the first place.
 
Zavvi was highlighted in the Independent yesterday, doesn't surprise me that they are in administration now. They recently opened a second store in Liverpool town centre in this climate? Madness!
 
Will_3rd said:
Zavvi was highlighted in the Independent yesterday, doesn't surprise me that they are in administration now. They recently opened a second store in Liverpool town centre in this climate? Madness!
Click to expand...

Irrelevant.. planning to open a large retail store takes a lot of time. This would have been started well before this 'downturn' became more obvious.
 
I got the Friends series 1-10 boxset from Zavvi for £40 recently, absolute bargain considering its usually around £100
 
You must log in or register to reply here.
Back
Top Bottom