Showing posts with label entertainmentUK. Show all posts
Showing posts with label entertainmentUK. Show all posts

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 Zavvi.co.uk 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.


Friday, December 12, 2008

The end of EntertainmentUK?

Robert Peston is just on, suggesting that Entertainment UK - the distribution arm of Woolworths - looks unlikely to survive the collapse of the company.