Sunday, December 14, 2008

Zavvi in one hell of a mess

Zavvi isn't having a good time of it right now - the unlovely chain was reliant on Woolworths for most of its deliveries and has already had to close its online store right at the busiest time of the year. Oh, and while bunches of prebooked and preprinted adverts were sending customers to the place.

It's getting worse: the company have had to bring Ernst And Young to help them pick their way through the minefield of their current trading. Zavvi owes £106 million to Woolworths' Entertainment UK subsidiary, and could be forced to hand over the money (which it doesn't have) or give back the stock in its stores:

Suppliers could claim they have "retention of title" over millions of pounds of stock, potentially allowing them to reclaim the goods from Zavvi stores.

People working with Zavvi are concerned that the company may be forced to choose between returning some stock at its most crucial time of year or continuing to sell it in defiance of the music labels.

Oh, come on, Zavvi - surely you don't think entertainment industry companies would be as short-sighted as to demand return of unsold stock right before Christmas, thereby making inevitable the collapse of one of the only two major record chains left trading? It's not like the BPI companies are bungling and can't separate short-term cash from long-term best interest, is it? It's not like they have a track record of that.

At the moment, the whole thing is balancing on a line of credit underwritten by Richard Branson - a man who must have thought he'd never have to worry about those bloody stores when he offloaded the Virgin Megastore chain back in September 2007.

The website is like a bizarre Mary Celeste webspace right now - you can go through, look at items: there's just no way you can buy them. "Pick up instore" is the best the website can offer, allowing all the convenience of a high street store with none of the convenience of not having to go into a poorly-lit digital rummage souk. That link, by the way, takes you to the Rubiks Cube page:
It's the no.1 Christmas present this year and the best selling puzzle in history! It has 43 quintillion combinations, but it can be solved in under 30 seconds.

The number one Christmas gift this year? Really? Perhaps in households that are relying on Zavvi for their income.

I don't want to blame the Rubiks Cube page for bringing down the whole company, but is "hey, this is a puzzle which you can solve in less than a minute" really a great selling point for any product? "Hours of fiendish fun", maybe; "seconds to learn, a lifetime to master" - that could be good. But "buy your kids something that has an even shorter lifespan than our company" doesn't sound like a sweet spot for your consumer goods.

Last weekend I happened into a Zavvi for the first time since they grew ashamed of their roots and started to hide the records behind the service elevator, to buy a DVD box set as a gift. "Would you like a bag?" asked the assistant. Normally, I'd decline but I had other shopping to do, and it was a gift needing concealing, so I said "yes, please."

The assistant disappeared under the counter and re-emerged holding the sort of brown paper bags greengrocers would use for mushrooms, shoved the box into the bag and handed it over.

So I'm left holding a package which is same size, shape and weight as it was before, and still equally as difficult to carry as it had been before the bag became involved. Only now: it looked like pornography.


Jack said...

I've just come back from a training course for starting working for Virgin Trains, and they spent the first day telling us how respected the Virgin brand was by customers all over the world. I thought it would be inappropriate to point out how the businesses now known as Zavvi and Absolute Radio both decided the name wasn't worth keeping.

Anonymous said...

Part of the deal when Megastores and Virgin radio changed hands was that they couldnt continue to use the Virgin Brand.
Branson doesn't want to be associated with it when it sinks - that was the whole plan.

Anonymous said...

I would say the very fact that they're still using brown paper bags (which I'm pretty sure I never, ever came across when I still regularly bought CDs in shops a decade ago) sums up precisely where they are and *why* they are where they are.

Olive said...

Was it porn, Simon?

Olive said...

The supply chain problems would certainly explain their TV ads for classic musicals on DVD- "We've been rummaging around in the warehouse and found a big box of copies of The Sound Of Music and Rocky Horror!"

Anonymous said...

Guys, I work for Zavvi & I can tell you that we are trying very hard to make this Xmas the best it can be for our customers under very difficult circumstances. The whole EUK thing was a kixk in the guts the week Take That, Hancock, Britney et al came out... but it's sorted now! We have a good supply of the big hitters this Xmas & the Xbox deal @ the moment is the best on the High St. As for "brown bags"... it's true that some exist from when we rebranded but it should be looked upon as environmentally friendly as opposed to an inconvenience to the punter... get behind your entertainment stores... Zavvi AND HMV so that the man/ woman on the street can have the choice and not just a handful of titles from Tesco Metro or whatever... you decide.

Simon Hayes Budgen said...

It would be lovely to get behind "our" entertainment store - only Virgin and HMV both long since ceased to have anything much to do with the things I want to buy. The music collection is poor, and - while certainly wider than Tesco Metro - doesn't really live up to the idea of what a specialist retailer should be offering.

And I'm sorry, but don't tell me how to view being given a pointless bag - it's fifteen months since the rebrand, and a bag the same shape as the product without anything to carry it by is, actually, an inconvenience. It's not even environmentally friendly, as the bag performed no function and was therefore just a total waste of resources.

Telling customers that they shouldn't see an inconvenience as inconvenient and implying that we owe Zavvi our custom. I think I can see why the company is disappearing.

cougar said...

Simon h b
The bulk of your comment being about the size & shape of a bag is not what I expected to hear back... I believe you are missing the point.

Zavvi is now hitting the headlines for all the wrong reasons & when the dust has settled and the only high street option you have will be HMV you may rightly feel a bit miffed about the choice.

These are two retailers selling similar product at competitive prices... lose one then the other can increase, ever so slightly, the cost of the products so although you don't "owe" Zavvi your custom it makes sense to keep shops like it in business.

Before UK retail is swallowed by Tesco & the Internet... we should all take a moment to reflect on what the "High Street" is all about... choice for the consumer, jobs for the workers & revenue for the country... lest we forget.

Simon Hayes Budgen said...

And once again, Cougar, you demonstrate exactly why Zavvi is destined for history.

I'm a customer. I was spending money in your store. I was given a totally useless bag. I make a gentle observation that this seems to sum up the general level of customer service at the store - and you don't seem to understand why it matters.

As for the suggestion that somehow shopping at Zavvi is a moral good - are you serious? I'm supposed to pretend that what remains of what was once a multinational chain store is in some way like a independent store? After - in your previous life - Virgin Megastores ran many of the genuine independent stores out of business over the last twenty years?

HMV won't put the prices up, because HMV aren't competing with Zavvi - they're competing with online stores.

I don't want to buy music at Tesco. I can't find the music I want to buy at Tesco. You know what, though? I can't find the music I want to buy at Zavvi, either. In fact, so madly focused on stacking up DVD box sets and flogging mobile phones, I tend not to be able to find any music for sale at Zavvi without spending half an hour traveling up escalators and roaming past the t-shirts and geegaws.

I'm genuinely sorry that people are going to lose their jobs due to the chain being so poorly managed over the last few years. But from a purely personal point of view, one less chain place which offers a very limited stock in a horrible retail environment with dreadful customer service isn't going to make my entertainment life so very different.

cougar said...

Simon h b,

If we may, lets leave the bag thing at the door.. ok.. good..

As a customer, you are more than entititled to your opinion of Zavvi, I geddit... we don't have the music range instores.. no one does because music, unfortunately, is on its knees but that's another blog.

What I am trying to say to you is that with less stores on the high street the nation loses out.. it IS a moral argument because there will be more independent & multinational retailers going to the wall next year if we don't support them.. and then the economy will snowball beyond control.

I give a sh*t about all my customers and I will endeavour to find whatever it is they are looking for without hesitation and the majority of Zavvi stores have the same philosophy.. so before you consign us gratefully to the dustbin remember that for every one customer that is dissatisfied with the service there are many more who will miss us if we go.

Simon Hayes Budgen said...


I hate to harp on about the "bag thing", but I think you're missing why it's important. My experience of Zavvi, the last time I went there, ended up with me being given a totally useless bag - given that I'd not been able to find the actual product I'd gone in to buy, and my alternative choice was only offered in a box so battered that I couldn't buy it to give as a gift, by the time I was handed a useless bag for something that I did want to, I was already a dissatisfied customer. I'm not suggesting it's a commonplace, but it is a metaphor for a store whose staff don't really think about the customer, for management who haven't put any effort into making shopping a pleasant experience.

I'm sure you do care about your customers, but I wouldn't be so quick to assume that there are "many more" to set against the dissatisfied ones. And even if there are, clearly there aren't enough of them, otherwise you wouldn't be in administration.

A company which is fighting for its very existence can't afford to treat customers poorly; a company which has had to close its website needs to take real good care of its physical customers. To make the argument why it's worth paying more, going out of your way, fighting the crowds, paying for petrol and parking or bus fare to come into your store.

If you were an independent store, disengaged staff, dingy shops, sixty quid box sets which look as if they've been kicked up and down the length of the mall, all that might be thought charming. If you were a Probe, or a Selectadisc, or even a pre-HMV Fopp, there might be a moral good in paying a premium to shop with you. But a chain store which shrugs when you point out its stock is lacking range and says "yeah, well, there's no money in selling music"? Even if I wanted to do good by supporting you, since I struggle to find anything I actually want to buy there, what would you suggest I do?

Anonymous said...

simon h b,

You raise valid points about retail in general...

There are pockets of us who care & there are others who don't.
It looks as if I will be "out there" in a couple of weeks or so if/when it goes tits-up..

Do I give up with retail? Start over in a new direction? I don't know..

Entertainment retail should be easy.. it's not.

Supermarkets & the Internet (here I go again.. I know) can afford to lose money on chart lines just to get punters in the door.. whereas Zavvi must work within tight margin parameters to keep going..

What the likes of Tesco, Asda, Amazon lack is a soul.. specialist knowledge from like-minded people who "get it".. who can appreciate what it feels like to browse racks for an record or a film that they love.. that still exists, but it's fading fast..

Maybe it's nostalgia (I've managed in music stores [Woolies, MVC, Virgin, Zavvi] for nearly 15 years now and it's coming to an end..

I tell you one thing though Simon, I will continue to shop on the high street for my music & DVD's.. HMV win.. great.. I'm in the queue.

Happy New Year mate :)

Thanks for listening.

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