Zavvi

Region

United Kingdom; Ireland

Associated With

Zavvi Entertainment Group Limited - acquisition vehicle

Defining Feature

Bright green rebrand of the former Virgin Megastores chain

Status

Closed - original physical chain stopped trading in February 2009

Overview

Zavvi was the UK and Irish entertainment retailer created from the Virgin Megastores chain in 2007.

Under its bright green identity, the shops pushed beyond music into games, films, books, clothing and related merchandise, while keeping an online store.

Entertainment UK's failure cut off its sole stock supplier amid existing losses and cash pressure. Zavvi entered administration in December 2008; its remaining shops stopped trading by February 2009, before The Hut Group relaunched the website as a separate online operation in March.

Why It Mattered

Games were becoming central to a business inherited from music retail. Zavvi’s reported first-year figures put games at 30 per cent of sales while music sales fell 18 per cent. Its broader product mix reflected an attempt to give shoppers reasons to visit an entertainment specialist as demand for its former core product declined.

From Virgin Megastores to Zavvi

• The acquisition vehicle was incorporated as Broomco (4094) Limited on 10 July 2007; Simon Douglas and Stephen Peckham became directors on 1 August.
• The management buyout completed on 14 September 2007 and was announced on 17 September. Zavvi’s Caulder Moore identity was unveiled on 11 October.
• Individual conversions followed at different times: Oxford Street was freshly rebranded by early November, while a Newcastle photograph records Zavvi signage on 9 November.
• Reports placed the acquisition estate at 125 UK and Irish shops, but the OFT later cited 114; the administration-stage total remains unresolved.

Companies, Ownership and Purchase Terms

• Zavvi Entertainment Group Limited was the acquisition vehicle, while Zavvi Retail Limited was the operating retailer identified by the Office of Fair Trading.
• A charge over Zavvi Entertainment Group’s shares was created in favour of Virgin Holdings Limited on 14 September 2007, but it does not establish the final beneficial ownership split.
• Completion reports left the purchase consideration undisclosed. Later descriptions of a nominal price do not confirm the often-repeated £1 figure.

Administration and Break-up

• Following Entertainment UK’s administration, the OFT recorded sourcing and credit problems, operating losses, seasonal working-capital pressure and roughly £13 million in quarterly rent falling due.
• Six named UK Zavvi group companies entered administration on 24 December 2008, but administrators were still trading 92 shops in January 2009.
• HMV initially agreed to acquire nine UK and five Irish shops for £0.7 million, excluding separately valued stock; Head Entertainment later completed seven shop acquisitions.
• Zavvi Retail moved into creditors’ voluntary liquidation in December 2009, while Zavvi Entertainment Group Limited was dissolved on 27 June 2015.

Gallery