Entertainment wholesale distributor EUK has failed to attract a buyer and the business will now be wound down by the administrators.
EUK, which was part of Woolworths Group, will continue to operate with a reduced workforce of 375 employees. Seven hundred employees were made redundant today (Dec. 12) and efforts to sell the business as a going concern will be scaled down.
EUK was placed in administration - roughly equivalent to Chapter 11 bankruptcy protection in the U.S. - on Nov. 27 along with Woolworths' retail business. The 800-plus stores launched a closing down sale yesterday (Dec. 12).
EUK's customers include entertainment retailer Zavvi and mass merchants Sainsbury and Asda as well as Woolworths. However, stores were forced to seek alternative supplies when EUK failed to provide key titles by Take That and Britney Spears on Dec. 1.
Stores serviced by EUK accounted for just under 32% of all albums sold in the U.K. for the 12 months ending Oct. 12, according to the market research company TNS.
Dan Butters, joint administrator and reorganisation services partner at business advisory firm Deloitte, said in a statement: "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."
He said they would be working closely with government agency Job Centre Plus, while the Insolvency Service's Redundancy Payments Service will work on approving claims for employee entitlements.
Butters added: "We are extremely grateful to the staff and management for their support throughout this difficult time."
Bertrams Books, a fully owned subsidiary of EUK, and DVD publisher 2Entertain, a joint venture between EUK and BBC Worldwide, will continue to trade as usual.