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Business News HMV Timeline Retail
Fopp goes into administration
By CMU Editorial | Published on Monday 2 July 2007
Now this is, I’m sure you’ll agree, all a bit sad. Independent music retailer Fopp, whose massive expansion in recent years made them less ‘independent’ and more one of the big boys of UK music retail, are no more.
After two weeks of speculation about the future of the popular music chain, all of which followed an announcement that the company was putting all its book ordering on hold and then a sudden chain-wide stock check that necessitated closing stores on a busy Friday afternoon, Fopp bosses confirmed on Friday that the company was in administration.
A spokesman for the firm simply told reporters: “It is with great regret that we announce the closure of Fopp”, while Colin Dempster of the company’s joint administrators Ernst & Young said: “The stores have been closed by management and shop staff sent home. We are currently assessing the financial position of the companies; once this has been completed we will have a better idea of the future of the businesses”.
The record chain went into administration less than a week after the firm’s top man and majority shareholder, Gordon Montgomery, told reporters that, erm, his company wasn’t going into administration. Following the announcement the chain was closing the company’s spokesman claimed the firm was, in fact, profitable but that it had failed to secure support from its stakeholders and suppliers during a period of financial difficulty. Presumably that included their bank HBOS, who they were known to have been in discussions with for at least a week about the future of the business.
Reports suggest that while employees of the company had, like much of the industry, become suspicious about the future of the chain, they were still pretty shocked about the overnight closure which came the day before pay day, leaving most of them out of pocket, in the short term at least. It now remains to be seen what happens to the company, its stores and its employees. Fopp remains a respected brand among music fans, but given the state of the music retail sector – with big boy HMV reporting its own financial hardships just last week – it will be interesting to see if anyone out there is actually interested in acquiring a 100+ store record shop company. When Fopp’s then bigger rival Music Zone went into liquidation earlier in the year it was Fopp that came to the rescue, acquiring 67 of the company’s stores – a decision which some are saying directly led to Fopp’s own downfall.
Whether or not the Fopp brand does, ultimately, live on, this relatively sudden closure of one of the recent success stories of music retail will throw further doubt on the long term future of music retail at large, with most of those trading in the specialist music store sector facing a daily battle to compete with price cutting supermarkets and mail-order websites, not to mention the long term threat of the growing download sector. Which is all rather depressing for a Monday morning, I’m sure you’ll agree.
