Zaavi (Virgin Megastore) goes into administration

Ok, Woolies was no surprise as it was utter shite, but I did NOT see this coming.

Zaavi (aka Virgin Megastore) in administration

They had one of the highest turnovers of any business not so long ago... how badly did they f**k that up?

It seems to have been down to them using a single supplier, a supplier who was part of the Woolworths group. Domino effect by the sounds of it.

Hmm. Although unlike Woolies I can't see nobody wanting to pick this up. If it closes it would effectively mean HMV would have a monopoly on high street general media.

It's a very lucrative business and if it was just a supply problem someone could pick that up for a bargain!

Massive queues in Bromley yesterday, PS3s going for £250! and Xbox360s for £150!

Must be desperate.

Man, I'm heading there Boxing Day, pretty cheap stuff in there a lot of the time, looks like I'm going to have to look into spending more of my car savings, shame.

Sod the car savings, think I'm heading in there on Boxing Day with some of my house savings & my shiny new credit card. But I reckon that someone will want to pick them up and save them. I saw in the paper yesterday that it's predicted up to 15 high street retailers could face going bust in the New Year, never figured Zavvi would be one of them.

Might go and pick up some games for my new Wii

Zavvi was an obvious one, people had been speculating for weeks that they were in trouble. Branson got the Virgin brand name off them right in the nick of time. And I disagree that they are an attractive company to pick up, more and more people are downloading music and buying multimedia off the internet these days, high street multi media shopping is fast becoming a thing of the past.

What companies do people reckon may be in trouble next?

I go for WH Smith who are really like Woolworths in a lot of ways, hopefully they have been managed a little better though.

Smiths is definitely a good call. I've been in a few times over this last month trying to find things for Christmas presents, and I either couldn't find what I wanted due to a poor selection available, or if they did have what I wanted it was considerably more expensive that a shop further down the street.

DIY shops could also suffer due to the total stagnation of the housing market.

Why is nobody warning each other of bargains?! Damn you Smash!

I agree with the Smiths call, everything they sell is so bloody expensive, I would think one of the major high street sports chains as well.

USC is also in trouble about half the chain has been bought out but the rest is going,
.

Smiths have a niche market though which may save them. Even though the stuff they sell is expensive you rarely find a competing stationary shop conveniently near Smiths. Or I don't anyway. The only exception is Oxford but that's to be expected.

In Croydon it's Smiths or nothing and I'm sure it's not alone.

WH Smith distributes a lot of newspapers so there safe. They also have a lot of strategic shops at train stations that sell papers to commuters. You may see a few of the high street shutting down but they're pretty safe. As for DIY stores, people aren't buying homes so there's probably a market for doing up what they currently have.

Small building firms are not going to enjoy 2009.

JK wrote:Smiths have a niche market though which may save them. Even though the stuff they sell is expensive you rarely find a competing stationary shop conveniently near Smiths. Or I don't anyway. The only exception is Oxford but that's to be expected.

In Croydon it's Smiths or nothing and I'm sure it's not alone.

The thing is, Smiths don't have a niche market, that is their problem. Getting by on sales of pencils and writing paper isn't really possible.

And loads of towns were in the "it's Woolworths or nothing" situation, so that doesn't really do much good.

Big Dave wrote:USC is also in trouble about half the chain has been bought out but the rest is going,
.

Isn't it the present owner who has bought a sizeable number of the stores via a new holdings company in an effort to safeguard jobs? They reckon only 300 jobs are in danger now rather than the entire company.

Anyway, I picked up No Country For Old Men for £4, American Psycho for £3 and Knocked up for £2.99. Excellent.

Sweatsock wrote:It seems to have been down to them using a single supplier, a supplier who was part of the Woolworths group. Domino effect by the sounds of it.

Am I the only one that was really surprised that a company of that size put all it's eggs in the basket of a single supplier?

Nope, I was surprised too, I didn't think businesses did that anymore. It just doesn't make sense to me to just use the one supplier.

KabukiJoe wrote:Nope, I was surprised too, I didn't think businesses did that anymore. It just doesn't make sense to me to just use the one supplier.

That's the economics of it though - they can't compete in their market without doing that. The supermarkets have locked down high volume, low variety deals with supplier chains a number of whom have now decided that'll provide the biggest yield for their business (which is true as it happens) so for a high street retailer that would be looking for a fairly extensive catalogue, they are severly restricted as to who they can go to that can provide a competitive rate.

I'd have thought that by using a number of different suppliers, they could use that to play off the suppliers into knocking down prices in an effort to ensure a larger slice of their custom.