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Last Updated: Tuesday, 3 July 2007, 09:57 GMT 10:57 UK
Music chain Fopp sheds 700 jobs
Fopp Glasgow
Glasgow's store is among those that have closed
About 700 workers at collapsed music retailer Fopp have been made redundant by the company's administrators.

Ernst & Young said that the move was "unfortunate" but that Fopp was not in a position to resume trading.

It said that store managers were being kept on while the prospect for re-opening was assessed.

Fopp's 81 stores were shut on Friday after receivers were called into the struggling business, which also owns some former Music Zone outlets.

"We would urge anyone with a genuine interest in taking on stores as going concerns to contact us immediately," said joint administrator Tom Burton.

"In the meantime, we wanted to ensure that employees have the opportunity to claim their statutory entitlements through the Redundancy Fund as soon as possible."

Cash flow

Fopp, which saw its suppliers revoke its licences to sell stock, is the latest victim of the slump in CD sales.

Other retailers such as HMV have also suffered a sharp fall-off in sales as more customers have migrated online to access music.

Known for cheap CDs, DVDs and books, the Glasgow company has insisted it remained profitable but had failed to gain support from stakeholders and suppliers.

Analysts say Fopp has been hit by the rise of supermarkets and online retailers selling CDs and DVDs, as well as the surging popularity of downloading music from the internet.

There has also been speculation that Fopp's purchase of 67 stores from the administrator of music retailer Music Zone had put pressure on the firm's cash flow.

That deal trebled the number of branches of Fopp, which was originally set up from a market stall in Glasgow.


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