U.K.'s Music Zone closes 31 stores
EmptyLONDON - Music Zone, the British music retailer which recently went into administration, has shuttered 31 outlets. The chain's administrators Deloitte pulled the trigger on the stores, which will result in the loss of 325 jobs.
Music Zone was placed into administration Jan. 3, after blaming tough trading conditions. Bill Dawson and Nick Dargan, from Deloitte's Reorganization Services division, were appointed joint administrators.
Dawson explains that the decision was made after undertaking thorough analysis of the business. "During the first week of trading, the administrators spent a considerable amount of time assessing the viability of the business and the difficult decision was taken to close a number of stores," comments Dawson.
"However," he adds, "we have commenced a marketing strategy to seek a buyer of the business as a going concern and continue to work hard to achieve a positive result for Music Zone."
Effective Tuesday, Music Zone operates from 72 stores across the United Kingdom, employing 775 staff.
According to Deloitte, a number of unidentified parties have "expressed an interest" in the business.
Music Zone began life in 1984 as a single-store operation in Stockport. After buying up 41 stores from the MVC brand in 2005, Stockport, England-based Music Zone boasted an empire comprising 104 stores, 1,100 staff and revenue of roughly £115 million ($227 million).
In that year, the group had risen to be the No. 3-ranked music specialist in Britain, behind HMV and Virgin, respectively. During that period, the group accounted for 2.6% of expenditure on albums in the United Kingdom, and 4.4% of singles sales, according to data published in the BPI 2006 "Statistical Handbook."