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The Office of Fair Trading (OFT) is investigating whether HMV's acquisition of Zavvi stores is a 'relevant merger situation'. If it is deemed so, then the OFT could look further into the issue to see if it means a 'substantial lessening of competition'.
A further 629 jobs at Zavvi have been saved after HMV bought 19 stores, with Head Entertainment lined up to buy another eight. The administrators reached an agreement yesterday (17th February) with HMV Music and Head Entertainment to sell the shops in the UK and Ireland.
Administrators Ernst & Young announced that five more stores have been sold to HMV, which means that 111 employees will transfer over immediately to HMV. Over the course of the next two weeks these Zavvi stores will also be rebranded as HMV. This takes the total number of stores bought by HMV to 19, saving 380 employees.
Tom Jack, joint administrator of Zavvi, said: "This is a fantastic result for the employees and customers of the stores concerned." Despite the good news the OFT will examine the purchase as it may affect competition.
Five stores have also been sold to Head Entertainment with a further three stores expected to complete by 20th February. This would ensure the transfer in total of another 249 jobs, The deal also includes the sale of all remaining Zavvi stock.
Jack said: "I would like to thank all of Zavvi's staff and customers for their commitment and continued support for the business throughout the administration. Whilst it has not been possible to secure a sale of the business as a going concern, we are delighted to have been able to secure continued employment for 629 Zavvi employees."