By Ben Cardew (MW)

 

Administrators are to wind down EUK after Deloitte failed to find a buyer for the distributor.

 

A skeleton staff of 375 employees will stay on at EUK to help with the process of winding down but the move means the immediate loss of 700 jobs.

 

Staff were told this morning that Deloitte had failed to find a buyer for EUK, after an interested party pulled out earlier in the week.

 

Dan Butters, joint administrator and reorganisation services partner at Deloitte, says, “Regrettably, despite our continued efforts, we have been unable to identify a suitable buyer for the business. Whilst we will continue to consider offers for the sale of the business as a going concern, we will now focus on realising value from the company’s assets.

 

“Unfortunately, it has been necessary to make 700 redundancies at the company’s head office and distribution centres in Middlesex. We will retain a core team of 375 employees.”

 

EUK was placed into administration in late November alongside Woolworths Retail, due to “cash flow problems”. Deloitte has recently started a closing down sale at Woolworths’ 800 UK shops.

 

EUK previously supplied entertainment products to companies such as Zavvi, Asda and Sainsbury’s.

 

Deloitte confirmed that Bertrams Books, a fully-owned subsidiary of EUK, and 2Entertain, a joint venture between EUK and BBC Worldwide, will continue to trade as usual.

 

Butters adds, “We are extremely grateful to the staff and management for their support throughout this difficult time.”

Comment on this story

That's REALLY bad. :o

I don't understand it :(

Oh my god. Terrible news. Woolies is officially screwed now, Zavvi can't be far off.

Surely Zavvi will find somewhere else to get their stock from? There is clearly a need for it!

 

 

Zavvi, Asda and Sainsbury’s will need to find a new permanent distributor. Hopefully it won't mean a hike in prices.

Zavvi's fine, we've been getting new stock in all week.

 

I just don't understand how a proftable arm of WW Retail can be wound up. It's bizarre to say the least.

Zavvi, Asda and Sainsbury’s will need to find a new permanent distributor. Hopefully it won't mean a hike in prices.

I think that's what will happen, or if not that they probably just won't stock (Asda + Sainsburys) albums. Hopefully that won't happen (it's a bit to drastic), but album sales will defiantly plumit next year.

Oh my god. Terrible news. Woolies is officially screwed now, Zavvi can't be far off.

 

HMV also posted multi-million pound half year losses! :(

Zavvi's fine, we've been getting new stock in all week.

 

I just don't understand how a proftable arm of WW Retail can be wound up. It's bizarre to say the least.

thats what i don't understand.

 

Why wind up the profit making part? Couldn't they have just separated to two companies and floated EUK?

Zavvi, Asda and Sainsbury’s will need to find a new permanent distributor. Hopefully it won't mean a hike in prices.

 

Shouldn't do... especially since Morrisons, Tesco and HMV will be able to offer CDs at low prices still. :lol:

Yes its really sad. I heard yesterday that lots of shops have or are to be closed down due to Bankrupt and the government not having anymore money :(

Edited December 14, 200816 yr by KJ Christmas Rob

thats what i don't understand.

 

Why wind up the profit making part? Couldn't they have just separated to two companies and floated EUK?

 

Exactyl!

 

It almost has a whiff of if we're going down, you're all coming with us :arrr: :lol:

Shouldn't do... especially since Morrisons, Tesco and HMV will be able to offer CDs at low prices still. :lol:

Only until when VAT will shoot up next year. :P

Yes its really sad. I heard yesterday that lots of shops have or are to be closed down due to Bankrupt and the government not having anymore money :(

The goverment has never bailed out shops! I can see a few more famous names going under soon though :(

thats what i don't understand.

 

Why wind up the profit making part? Couldn't they have just separated to two companies and floated EUK?

 

The administrator’s job is to maximise the realisation of the value of the company’s assets for the vultures/creditors, i.e. nullifying losses asap: laying off staff (wages), selling off stock (locked capital) and shutting shops (rent, rates ect).

:o I am shocked a buyer could not be found for EUK!

 

So do we now expect the sale of the century of all their entertainment stock?!

The administrator’s job is to maximise the realisation of the value of the company’s assets for the vultures/creditors, i.e. nullifying losses asap: laying off staff (wages), selling off stock (locked capital) and shutting shops (rent, rates ect).

i'm quite aware of what happens during corporate insolvency thanks.

Zavvi's fine, we've been getting new stock in all week.

 

I just don't understand how a proftable arm of WW Retail can be wound up. It's bizarre to say the least.

 

Good to hear.

If many distribution companies and music retailers go under then who will replace them? What if no-one does? I mean, they may find that there is no more profit to be made from physical music, as although album sales haven't gone down loads the price of them has and profit margins are ever smaller. Its a very worrying thought, although i might be being ridiculously pessimistic here.