MVC calls in administrators
Piracy partly to blame for retailer's troubles
DVD and CD retailer MVC has called in the administrators mid way through one of the toughest trading periods of the year. At a time when many High Street stores are realising shortfalls in their seasonal sales, MVC took the decision yesterday, 21st December 2005, to call in administrators' firm Kroll.
Kroll told BBC Business News that MVC was suffering from "changing market dynamics", namely increased competition from supermarkets, online downloaders and increased piracy.
The decision follows hot on the heals of fellow retailer Unwins who also went into administration this week. Kroll insist there was plenty of stock for the shops to fill MVC's shelves. "This isn't another Unwins," said a spokesman.
The future of MVC's 700 staff at their 73 outlets was immediately thrown into doubt "We're not planning to make any redundancies... and are reviewing options for the business," a spokesman for Kroll said. MVC, formerly part of the Woolworths Group, will keep trading over the Christmas period and staff will be paid while a buyer is found.
Administrators cast doubt over a deal to sell 40 of the stores to rival Music Zone stating that "these stores are now part of the administration".
Woolworths sold the MVC chain to a group of retail investors for £5.5m back in August 2005. MVC currently has an annual turnover of £100m.
December 22, 2005