British entertainment retailers are facing up to major supply problems from EUK, after the Woolworths Group’s distributor went into administration along with the company’s retail business.
It has emerged that EUK has not been making deliveries or taking orders since Wednesday (Nov. 26). EUK and the 99-year-old 815-store chain, which sells items ranging from sweets to DVDs and CDs, were put into administration effective Nov. 27.
EUK’s retail customers include Sainsbury, Asda, Morrisons, Zavvi and Woolworths itself. One of its suppliers, film distributor Metrodome Group, issued a statement today expressing uncertainty over whether it will receive the £320,000 ($490,500) it says EUK owes the company.
“Entertainment U.K. was one of the largest customers of the company, and, at the present time, the board estimates that it owes the Company approximately £320,000 ($490,500),” said the Metrodome statement. “The directors are unsure as to the recoverability of this sum and are seeking clarification on its recoverability and effect on the Company. Shareholders will be kept appraised of developments.”
The Woolworths stores and EUK are still trading, and Woolworths Group confirmed that Neville Kahn, Dan Butters and Nick Dargan of Deloitte & Touche were appointed as joint administrators. Woolworths Group is not in administration.
Ahead of major releases on Monday (Dec. 1), including Britney Spears’ “Circus” (Jive/Sony BMG) and Take That’s “The Circus” (Polydor), retail trade body the Entertainment Retailers’ Association (ERA) is calling for cooperation between Deloitte & Touche and music and video companies to ensure that supplies get through.
“Retailers are determined that fans will not suffer because of EUK’s problems,” said ERA director general Kim Bayley. “We are working around the clock to ensure adequate supplies reach stores in time for Monday. Britney versus Take That is shaping up to be an epic chart battle and we must make sure we do not run out of stock.”
Bayley added: “It is vital that the current logjam in the system is unblocked as quickly as possible. EUK is currently neither accepting orders nor making deliveries since Wednesday, but we are hopeful it will be open for business by Monday [Dec. 1]. This is the busiest time of the year for fans buying music and video so we hope everyone concerned pulls out all the stops.”
ERA is encouraging suppliers to ensure that stock reaches stores for the crucial Christmas sales period.
“We all understand that record and video companies need to manage their stock risk, but the greatest risk of all is that customers are greeted with empty shelves when they go shopping,” said Bayley, adding that retailers are currently well-stocked for Christmas on most titles.