Neville Kahn, Nick Dargan and Dan Butters have been appointed joint administrators to the licensing industry's largest retailer, Woolworths and the group's wholesale division, Entertainment UK.
Deloitte has hired Hilco – the restructuring specialist, which was in talks to buy the business before it collapsed – to help run the stores.
The firm has announced stores will remain open past Christmas and staff at the group's 815 stores will still be paid.
Neville Kahn, reorganisation services partner at Deloitte, commented: “Woolworths has suffered a number of cash flow problems. Strenuous efforts over recent weeks to keep these companies going have unfortunately failed and the businesses are now looking to be rescued under the administration process. The companies were placed into administration this morning and will continue to trade. Stores will remain open past Christmas and employees in stores will be paid.
“We have mobilised a large Deloitte team to stabilise the business and have hired Hilco as our agent to assist in the management of the retail business. We appreciate the cooperation and support from the management and staff at both companies. We are glad that arrangements are in place to ensure that all wages will be paid in full this week.”
Dan Butters, reorganisation services partner at Deloitte, commented: “We will be looking for a suitable buyer for all parts of the business. In the last 24 hours we have received expressions of interest from a number of parties for both the retail and wholesale businesses. We are working hard to ensure that any sale of the business, in whole or part, will preserve jobs.”
The company has struggled under the weight of £385 million of debt. Its problems were compounded over the past couple of months when it was forced to pay cash when buying goods, because trade credit insurers were no longer prepared to insure its suppliers.