Music Zone
From Wikipedia, the free encyclopedia
 |
This article is written like a personal reflection or essay and may require cleanup. Please help improve it by rewriting it in an encyclopedic style. (December 2007) |
| Music Zone | |
|---|---|
 |
|
| Fate | Administration |
| Founded | Longsight, Manchester (1984) |
| Defunct | January 3, 2007 |
| Location | Stockport, Greater Manchester |
| Industry | Retail Record store |
| Key people | Russ Grainger, founder |
| Former Parent | Fopp (briefly after January 2007) |
Music Zone was a music retailer in the United Kingdom. There were 37 branches of the company, which was formed in Levenshulme in 1984. It was briefly taken over by Fopp in 2007. It gained a reputation for being one of the cheapest music stores on the High Street, often matching the low prices of CDs that can be found in supermarkets. It was also known for selling DVDs, Video cassettes and Books.
Contents |
[edit] History
[edit] Early history
The first store was a market stall run by Russ Grainger in Longsight. He was soon able to buy a permanent shop, located next to the Stolen From Ivor clothes shop, near the Tandy store in Stockport. Even though the store was small and with competitors ranging from similar operators like Music Junction and Double 4 Records or majors like HMV, Our Price and Virgin, the firm managed to hold its own in the Stockport marketplace and soon after opened various branches in the Manchester region (taking on retailers such as Omega Music in Wigan).
[edit] Expansion
With local competitors such as Music Junction and Omega Music closing their branches, Music Zone started on a major expansion plan which saw it re-brand itself as a value led retailer called Music Zone Trade Direct. From the old Stockport store, the firm moved a few stores up the street to take over the top levels of the old Toy And Hobby shop (the ground floor was let to a shoe shop) which had been empty for a number of years. From this base the firm saw through its expansion plan which featured a value led emphasis on back catalogue, stock merchandising/racking based on price-points and the abolishment of singles (though this measure was reversed in the 2000s).
The low prices of the DVDs and books proved popular, and by 2004 it had 55 stores nationwide. These were largely confined to Northern England, however.
In Spring 2005 founder and Chairman Russ Grainger sold the company to a team led by the Managing Director, Steve Oliver. This management buyout was backed by equity funding from LDC and a loan and overdraft facility supplied by the Bank of Ireland and a new board of directors was put in place which included Retail Director Nick Standing and a new Commercial/Marketing Director, Eren Ozagir. Ozagir's store changes included an emphasis on selling store-space and promotions to studios such as Universal, Warner Brothers and Twentieth Century Fox.
In early 2006 the company bought 41 outlets from collapsed chain MVC. This allowed it to spread nationwide, with its purchased stores all trading as 'Music Zone'. The MVC acquisitions took the estate over the commercially important 100 mark and renewed the presence in London. The chain was, briefly, the third largest specialist CD and DVD stockist in Britain, less than 30 stores behind nearest rival Virgin Megastore. A new warehouse was acquired in the Denton area of Manchester.
[edit] Collapse
In addition to the company's trading being below par, the lead up to Christmas 2006 saw profit warnings issued by both Woolworths and HMV and with the collapses of two major home entertainment retailers earlier in the year (MVC and Silver Screen), confidence in the market was weak. Without any warning to Music Zone, on December 27th 2006 the Bank of Ireland withdrew its loan and future working capital facilities leaving management and LDC in the position of having to seek alternative banking arrangements, which proved to be an impossible task. Consequently, on January 3, 2007, the company went into administration,[1] with 31 stores across the UK closing two weeks later.[2]
On January 25, 2007, all stores ceased trading; the Head Office was closed on 30 January 2007, and the company ceased trading altogether with debts of ₤31 million.
[edit] The End
On 5 February, rival retailer Fopp announced it would be taking over 67 of the remaining stores as well as some of Music Zone's Stockport head office and Denton warehouse facilities, the administrator, Deloitte, turning down a Music Zone management bid to take a significant number of the stores themselves. [3]
Fopp immediately had difficulties rebuilding supplier contracts, and shut down a great number of the higher maintenance stores in March 2007, including its branch in Manchester city centre. On 29 June 2007, Fopp went into administration, resulting in the closure of all remaining Music Zone shops.
[edit] References
- ^ http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/03/cnmusic03.xml
- ^ BBC NEWS | Scotland | Music Zone closes Scottish stores
- ^ BBC NEWS | England | Manchester | Music Zone sells stores to Fopp
