EUK failure was ‘too much’ for Zavvi to cope with

The group founding partners of Zavvi have singled out the demise of EUK as having a big part to play in the chain’s

going into administration

.

In a statement released following the news that broke this morning, Simon Douglas and Steve Peckham said: "We have done all that is possible to keep the business trading, but the problems encountered with EUK, and particularly its recent failure, have been too much for the business to cope with."

Zavvi was formed after a management buyout of the Virgin Megastore division of the Virgin Group in September 2007.

The group is the UK’s largest independent entertainment chain with over 125 stores, and 3,000+ employees.

The collapse of Woolworths’ Entertainment UK distribution business "has resulted in considerable working capital difficulties," said Zavvi’s administrator Ernst & Young in a statement given to the BBC.

"Since EUK went into administration, and perhaps before, the impact of problems at EUK on the Zavvi group has been significant.

"Minimal deliveries, no returns and worse trading terms are just some of the areas impacted," BBC News quotes joint administrator Tom Jack as saying.

"In the absence of a buyer for EUK, and with dire trading conditions on the High Street, the Zavvi group has seen a material fall in sales and the directors have now been forced to place parts of the group into administration."