Fopp, which had been the one bright spot on high street musical retailing, has got into difficulties and - having had its branches shut down for "stocktaking" last week - have warned staff not to expect any pay this month as they battle to avoid administration:
She added that they involved administration, receivership or insolvency but cautioned that Mr Dempster had not yet been officially appointed by the court.
Dermot Power, of Ernst & Young rival BDO Stoy Hayward, said that, although HBOS, the banker to Fopp, and trade creditors had been “incredibly supportive”, administration was likely.
“BDO looked to create a restructuring without resorting to insolvency but we could not make it work,” he said.
Gordon Montgomery, the chairman and major shareholder of Fopp, who founded the chain from a market stall in Glasgow in the early 1980s, admitted last weekend that sales were falling. “We are experiencing difficulties. However, I can categorically state we will not go into administration.”
It looks like Fopp's expansion over the last year or so has thrown the company completely off kilter: in February it trebled its outlets at a stroke by buying most of Music Zone's stores; in January 2006 it had taken over branches of the defunct MVC.
At the moment, stores are trading but on a strict "cash only" basis. The website isn't taking any business.