Administrators Kroll 'hopeful for a buyer.'
British CD and DVD specialist retailer MVC has filed for bankruptcy and hired the U.K. arm of international "risk consulting' company Kroll as administrators.
MVC stores remain open. The company will continue trading "as normal" while the administrators review all options, Kroll said in a statement issued yesterday (Dec. 21). "The administrators are hopeful that a buyer will be found," Kroll added. Kroll is a division of New York City-based global professional services firm Marsh & McLennan Companies, Inc.
Marylebone, London-based MVC has 73 outlets nationwide and employs about 700 permanent staff. Annual revenue is estimated at approximately £120 million ($208 million).
The company was placed into administration following "cash flow difficulties experienced as a result of competitive trading conditions," the statement adds.
"The growth of supermarkets presence in this area, along with an increase in Internet sales, as well as the challenges of tackling pirate DVDs and CDs sales, has meant the company has struggled to perform as it expected," comments Andrew Pepper, who has been appointed joint administrator with Peter Saville and Gurpal Johal.
The news broke as U.K. chain Music Zone announced it had stepped in to acquire 40 MVC stores. "The 40 stores were sales-agreed but was not completed prior to the administration," says a Kroll spokesman. That sale will progress only after the administrators have declared that fair value in the transaction has been achieved, he adds. Neither party disclosed what sum had been offered for the 40 stores.
MVC's administration comes only four months after London-based retail investment specialists Argyll Partners purchased MVC from Woolworths Group for £5.5 million ($9.6 million).