Virgin Mobile loses two biggest distribution channels

Virgin Mobile loses two biggest distribution channels

Virgin Mobile has lost its two biggest distribution channels following the collapse of retailers Zavvi and Woolworths.

Zavvi went into administration on 24 December, threatening at least 3,400 jobs. Five of the 22 stores closed by Zavvi’s administrators, Ernst and Young, last week – in Torquay, Liverpool, Gillingham, Chatham and High Wickham – contained Virgin Mobile concessions.

The company currently has just 20 Virgin Media standalone shops and 83 branded concessions in Zavvi stores.

A Virgin Mobile spokesman said the 11 Virgin staff that worked in the five stores have been redeployed within the Virgin Media group. The remaining 92 stores will stay open for the time being, with a 50% off sale that began last Friday (9 January). It is not known what will happen to the 270 Virgin Mobile staff that still remain.

Zavvi, formerly Virgin Megastore, was formed after a management buyout of the Virgin Group division in 2007. It is the UK’s largest independent entertainment retailer.

Virgin Mobile CEO Graeme Oxby has previously outlined Virgin’s reluctance to open a large number of its own stores, as it has been successful in direct mail and telesales.

However, one source said: ‘The high street is a place where leases are very cheap so it could be time to go back into direct retail.’ A Virgin spokesman added: ’We have plans for more standalone stores.’ He also confirmed the company was currently ‘looking into’ it.

The virtual operator said it has channels in 4,000 other outlets, such as Carphone Warehouse, Phones 4u, Sainsbury’s, Asda and DSG.

The last Woolworths store closed on 6 January, leaving 27,000 people unemployed.

Ironically, Zavvi was badly affected by the demise of Woolworths, as its main supplier was Woolworths’ unit Entertainment UK, which went into administration
in November.

Zavvi has already lost several of its top-level head office staff. The remaining employees said, at the time Mobile went to press, that their futures hung in the balance as they waited for a firm decision.

Written by Mobile Today
Mobile Today


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