Woolworths’ problems take toll on Zavvi

Woolworths’ woes are causing grief for home entertainment retailer Zavvi. Woolworths’ retail division and its Entertainment UK (EUK) business fell into administration last week; Entertainment UK is Zavvi’s primary supplier of DVDs, music and games. The resulting supply chain issues have led Zavvi to stop selling those items online “while we work to resolve the situation and get back to normal,” as it explained on its home page. Zavvi – formerly Virgin Megastores – is switching to sourcing DVDs, CDs and games direct from the suppliers, as are other EUK customers, including Asda and Borders. 

As for Woolworths, administrator Deloitte has hired restructuring specialist Hilco to help run the stores, which will remain open at least through Christmas. It is hoping to have a preferred bidder by the end of the week. Hilco had earlier made a bid for Woolies, but it says it is no longer interested in buying the brand. Rumoured potential bidders include Theo Paphitis, owner of stationery retailer Ryman and a judge on Dragon’s Den; Ardeshir Nagshineh, Woolies’ largest shareholder; and equity groups Alchemy Partners, Cerberus and Sun European Capital.

To add to Woolworths’ problems, its joint venture with the BBC, 2Entertain, is also expected to fall into administration by the end of the week.

Whittard of Chelsea for sale

Troubled Icelandic investment firm Baugur has put Whittard of Chelsea up for sale. Earlier this year Baugur had called in KPMG to “review cash management” at the underperforming retailer/cataloguer of tea and coffee.

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Other Breaking Stories...

Kingfisher to shut Trade Depot

Kingfisher, the parent company of DIY retailer B&Q and tools cataloguer/retailer Screwfix, is closing its third UK business, Trade Depot, incurring an estimated £20 million in costs. Trade Depot had nine stores as well as a direct business. The company also announced its financials for the 13 weeks to 1st November: In the UK, sales fell 6.1 percent from the comparable period of last year, to £1.02 billion; retail profit dropped 19.8 percent, to £36 million. Screwfix sales for the period rose 8.1 percent, to £126 million, “driven by the continued rollout of trade counters”.

Etailer 247 Electrical ceases trading

Consumer electricals etailer 247 Electrical ceased trading and was placed in creditors' voluntary liquidation on 28th November. The company blamed the 21st November collapse of its major supplier, Bridisco, for its failure.

Findel home shopping sales down 1 percent

Half-year sales at Findel rose 1 percent, to £294.7 million. But benchmark profit before tax fell 17.6 percent, to £7.0 million. Within the home shopping division, sales fell 1 percent, to £171.3 million, though Kitbag was singled out for a strong performance. Findel’s other home shopping brands include I Want One of Those, The Cotswold Co and Studio. Sales within the educational division also fell 1 percent, to £92.7 million. The healthcare division performed well, however, with sales up 14 percent, to £30.6 million.

DSG posts loss for the quarter

Like-for-like UK and Ireland sales at DSG International for the 24 weeks ended 18th October fell 8 percent, to £1.83 billion. On the plus side, sales within the ecommerce division, which consists of UK brand Dixons and pan-European brand Pixmania, increased 9 percent, to £275.6 million. That wasn’t enough to keep DSG in the black, however: The electricals retailer posted a £29.8 million pretax loss for the period, compared with £52.4 million profit last year. This was the company’s first loss in 25 years. DSG’s other brands include cataloguer/retailer PC World and retailer Currys.

First-half sales up 3 percent at Park Group

First-half revenue at Park Group rose 3 percent, to £32.3 million for the six months ended 30th September. The parent company of Christmas hamper specialist Park and HighStreetVouchers.com also reduced its loss before taxation for the period, from £3.9 million to £3.2 million. Because the company’s business is seasonal, it usually carries a loss for the first half of the fiscal year but posts a profit for the entire year. The second half of the year has gotten off to a strong start for the company, with Christmas orders up 15 percent from last year and the average order value up 5 percent, to £374.

Record-breaking Monday online

The UK recorded its largest-even online shopping volume on Monday, 1st December, reports the IMRG. But despite the 3-percent increase in the number of transactions, to 4.6 million, actual revenue was flat. The IMRG is predicting that even more online transactions will take place next Monday, 8th December.

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