Despite posting a loss, Zavvi’s chief executive Simon Douglas told Retail Week it has improved EBITDA “significantly” and managed to “eat into losses by more than£10 million”, although he would not divulge the total loss for the year to September 12.
Douglas said “the release schedule looks outstanding across all genres” for this Christmas. He added that while there was no room for complacency “people are tightening their belts, but entertainment provides a bit of light relief”.
Music sales at the retailer plummeted 18 per cent as consumers opted for downloads instead of CDs. Although Zavvi is expected to sell music online in digital format soon, Douglas insists it will continue selling CDs for “at least another one to three years”. He admitted the future of the format looks less certain in another five years’ time.
DVDs were Zavvi’s number one category, with sales rising 2 per cent. Sales of games now account for 30 per cent of Zavvi’s turnover, making them the second biggest product category. Online like-for-like sales soared 148 per cent.
Virgin Megastores was bought out by management and rebranded Zavvi in September last year.