Iconic New Zealand music retailer Real Groovy has been rescued from receivership - but some record companies will be left out of pocket.

Directors Chris Hart and Martin O'Donnell last week bought back the assets of the flagship Auckland store from the receiver through their newly established company Fonografo. They have been joined in the venture by a new investor Ralph Brayham, who runs the online shopping mall Ferrit, which is owned by the country's biggest telecommunications company Telecom.

The Real Groovy group - which included four outlets and an online operation - was placed in receivership in October and since then the Christchurch and Wellington outlets have been purchased by their respective managers. The fourth store in Dunedin has been closed.

Hart told Billboard.biz the priority now for the Auckland operation will be to renew supply agreements with key suppliers and he believes most will take a "pragmatic" approach to the situation.

Record companies were reluctant to speak on the record about the matter, but it is understood that indie labels in particular are unhappy that the store's owners are back in business while they are still owed money. On the other hand, most agreed that New Zealand could not afford to lose another major music retail specialist.

Receiver John Cregten of the Auckland-based Corporate Finance confirms that there will be no money for unsecured creditors of the old Real Groovy operation. However, he adds that the Real Groovy directors had been "absolutely fantastic" to work with and had provided full co-operation during the receivership.

Hart established Real Groovy 27 years ago and the Auckland store carries over 35,000 music and DVD titles, along with books and other merchandise. Although the store has been an important new release stockist, it is best known for its massive second-hand range.

As well as the store operation, the new company Fonografo has also purchased the online business, www.realgroovy.co.nz, which claims to offer more than 900,000 CDs, 20,000 DVDs and a million books.

"The online operation has continued to trade during the receivership and we are looking to give it a big push in 2009," Hart adds. "We think there is still a huge amount of opportunity to be had there."