Music Zone goes into administration

Music Zone - the UK's third-largest music and film retailer by store numbers - has hit the buffer and Deloitte partner Bill Dawson has been appointed as administrator.

A Music Zone spokesman said: 'There is a growing number of high street retailers like Music Zone experiencing challenging trading conditions. Pre-Christmas trading was also poorer than expected.

'The decision by our bankers to recover debts and withdraw credit facilities without notice and with immediate effect left us and our private equity backers with no real alternative other than to appoint administrators.'

Dawson said: 'Music Zone has an excellent store portfolio with a UK-wide footprint covering predominantly prime high street locations. We're currently trading the business while seeking interested parties to acquire Music Zone.'

A spokesman for LDC, the company's private equity bankers, said: 'Despite the best efforts of a very capable management team, Music Zone has struggled in the face of aggressive pricing and deteriorating sales across the music and DVD sector.

'We're working closely with management and the administrators to identify the most favourable outcome for employees, creditors and shareholders.'

Music Zone operates from 104 stores, employing more than 1,000 people. Its turnover in the current financial year to May is forecast at£115 million.