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Zavvi issues clarification over EUK debt

Retailer says it hired Ernst & Young and assures consumers it will have stock for Christmas

Zavvi has issued a statement clarifying earlier reports that Entertainment UK had called in a debt of GBP 106 million.

A spokesperson said that it was Zavvi which enlisted the aid of financial services group Ernst & Young, not EUK as reported earlier, and that the group has been under the employ of the high street retailer for weeks.

"Zavvi Entertainment Group is disappointed to hear that the administrators for the Woolworth Group PLC have been unable to find a buyer for Entertainment UK," commented the spokesperson. "Our thoughts go out to all the employees at EUK who have been affected by today's decision."

"Contrary to speculation, Zavvi can confirm that its creditors have not appointed Ernst & Young, however Ernst & Young have been providing invaluable advice and expertise to the group over the past few weeks since Entertainment UK (Zavvi's main supplier) was placed in administration."

The spokesperson added that the company had already secured additional suppliers and that it would be ready for the Christmas shopping period.

"Zavvi would like to reassure customers that it is dealing direct with suppliers to ensure that the right product is available in its 125 stores for Christmas," he explained. "Zavvi is currently reviewing its distribution strategy and will announce plans in the near future."

Earlier today, Deloitte, administrators of Woolworths and EUK, announced that the distribution business was unable to secure a new buyer and the company would be staging mass layoffs as the business was wound down.

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