Closures (2007)
Having taken over rival chain Music Zone following their fall into administration, Fopp found themselves having cash flow problems. The company cancelled book deliveries in June blaming a change in location of warehouse from Bristol to Stockport (the old Music Zone warehouse).
On 21 June 2007 the company began accepting only cash transactions, stating 'card authorisation' problems as the cause. On 22 June 2007 the company closed all branches for 'stock taking' and said it was in talks with its bank. A week later the company announced a temporary closure in all its outlets and its online venture, and staff were informed that they would not be receiving their monthly pay.
On 29 June 2007 they called in receivers after a last-ditch deal that would have allowed Sir Richard Branson a way to devolve himself from the loss making Virgin Megastores without the negative PR of closing down multiple locations, but this deal failed to win support from Virgin's main supplier. The stores were closed, and staff were sent home with their monthly salaries unpaid.
The Fopp online webstore was taken down shortly after and replaced with the following message:
| “ | "It is with great regret that we announce the closure of Fopp.
Our store chain is profitable, well regarded and loved by our loyal customers and staff. However we have failed to gain the necessary support from major stakeholders, suppliers and their credit insurers to generate sufficient working capital to run our expanding business. We would like to thank staff and customers for their support over the past 25 years. Any outstanding website orders have now been cancelled and will not be fulfilled or charged." |
” |
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—Fopp closure announcement, 29 June 2007 |
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Ernst & Young were appointed as joint administrators of Fopp and Music Zone and issued a press statement detailing stores closed and the numbers of jobs lost at each location.
Read more about this topic: Fopp (retailer)