Zavvi has insisted it is not on the verge of administration after hiring Ernst & Young.

The entertainment retailer denied the restructuring firm has been “parachuted in” as The Times reported, but that it had been working with Ernst & Young since the collapse of its sole supplier EUK last month.

“Ernst & Young has been advising us and continue to do so,” said a Zavvi spokesman. “We needed expert advice to do with the accounts with EUK. It is not a restructuring [issue] and this is not the beginning of an administration.”

Zavvi said it was “disappointed” Woolworths' administrator Deloitte had failed to find a buyer for EUK.

“We are reviewing our distribution strategy and are in conversations internally about the best course of action,” the spokesman said. “In the meantime we will continue to deal with our suppliers direct.”

To comment on this story post a response below or e-mail Retail Week.