Zavvi Entertainment Group Ltd - History - Zavvi Era

Zavvi Era

On 17 September 2007 it was announced that the UK arm of the Virgin Megastores brand was to break away from the Virgin Group. A management buy-out offer was led by managing director Simon Douglas and finance director Steve Peckham, for an undisclosed sum, though reportedly £1. As a result, Zavvi became the largest independent entertainment retailer in the UK. EUK, the company's main stock supplier, also the supplier to chains including Woolworths and Sainsburys, were not involved with the management buy out but invested financially to support the new management team as well as employing most of the ex-Virgin buying team. After the change of ownership, all 125 stores continued to trade under the "Zavvi" brand rather than as "Virgin Megastores" and Virgin XS stores.

Some stores retained an individual Virgin Media concession that operated independently from the Zavvi store.

Zavvi Ireland had made a loss of €3.4 million in the year ending March 2007 as the new chain attempted to turn a profit, without the backing of the Virgin Group. On 21 September 2007, Simon Douglas announced that Zavvi would be making a fresh start in the entertainment retail space. This included the plans to focus more on the sale of games, to compete with GAME and Gamestation. Simon Douglas also stated that the company's in-store games department was to expand by 15% due to its success over the 2007 Christmas trading period. Two days later, plans were revealed that Zavvi would differentiate from their competitors with limited editions and exclusive products in addition to increasing the stores online market share during the next year. Following a trial period, it was announced on 28 March 2008 that all Zavvi stores would feature a book department.

In July 2008, near to the first anniversary of the Zavvi Entertainment Group, it was announced that the entertainment retailer was to partner with the charity Youth Music who would be hosting in-store events, band nights, sponsorship busking and music quizzes to raise money for the organisation, along with installing collection boxes across its stores. In November 2007 the Scottish pop band Wet Wet Wet were the first band to play two gigs at Zavvi stores, in Glasgow and London.

On 9 January 2008, Simon Douglas released a statement claiming a 10.8% increase in sales on the previous year for the 4-week trading period ending 5 January. As a result, the company featured in Grant Thornton's top five performers for the Christmas trading period of 2007.