Music News Bulletin - 15/12/08

Distributor EUK Winds Down, 700 Jobs Cut
"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." [BillBoard]

EUK to be wound down
"Administrators are to wind down EUK after Deloitte failed to find a buyer for the distributor. A skeleton staff of 375 employees will stay on at EUK to help with the process of winding down but the move means the immediate loss of 700 jobs.

Staff were told this morning that Deloitte had failed to find a buyer for EUK, after an interested party pulled out earlier in the week. Dan Butters, joint administrator and reorganisation services partner at Deloitte, says, “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." [MusicWeek]

ERA calls for calm
"The Entertainment Retailers Association has called on labels to support music retail in the wake of the crisis at Woolworths/EUK and the ongoing problems of Zavvi.

Administrator Deloitte said last Friday that it was winding down EUK, after failing to find a buyer, while Woolworths’ stores embarked last week on a whirlwind “closing-down” sale. Meanwhile, Zavvi was forced to deny stories that its creditors had called in an emergency restructuring team.

ERA, which represents retailers of music, video, DVD and computer games, is warning that unless suppliers continue to trade on normal credit terms with the retailers caught up in these difficult situations, they could create further difficulties in the market." [MusicWeek]

AIM Lawyers Cancel Pinnacle Contracts
“Independent labels' trade body AIM's lawyers have written to the administrators of Pinnacle terminating dozens of labels' contracts with the distributor.

The independent distributor based in Sidcup, Kent went into administration - roughly equivalent to Chapter 11 bankruptcy in the U.S. - on Dec. 3. AIM held an emergency meeting at is west London HQ yesterday for labels affected.

A letter has now been sent on behalf of 92 labels to the administrators BDO Stoy Hayward. The letter states that the 92 labels are terminating their agreements with Pinnacle and asks for confirmation that the labels can collect their stock from the premises.” [BillBoard]

Pinnacle Administration
“Administrators were appointed on Wednesday 3rd December in respect of Pinnacle, one of the UK’s oldest and largest independent distributors. An emergency meeting was held at AIM (The Association of Independent Music), and we have appointed Martyn Bailey from Forbes Anderson Free and barrister Philip Flower to take appropriate action.

A letter has been sent today on behalf of 92 labels to the administrators BDO Stoy Hayward terminating their agreements with Pinnacle and asking for confirmation from the administrators that the labels can collect their stock from the premises.” [RecordOfTheDay]