DELOITTE ADMINISTRATORS have been called to collapsed DVD rental retailer Blockbuster.
Insolvency trade body R3 president and Deloitte partner Lee Manning (pictured) has been appointed administrator. Neville Kahn, also a Deloitte partner, joins him, although Kahn’s hands are full as he has recently been appointed to high-profile and large administrations Comet and HMV. They are joined by Deloitte partner David Smith.
Blockbuster is headquartered in Uxbridge and has about 528 stores, employing approximately 4,190 staff.
The administrators confirmed the company has run into trouble in the last few years, facing increased competition in the rental market from online offerings such as Netflix and Lovefilm.
However, they believe that there is a profitable core business and hope to sell the company as a going concern. In the interim, they will continue to trade and, for now, gift cards will be honoured.
Manning said: “In recent years, Blockbuster has faced increased competition from, internet-based providers along with the shift to digital streaming of movies and games.
“We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.
“The core of the business is still profitable and we will continue to trade as normal in both retail and rental whilst we seek a buyer for all or parts of the business as a going concern. During this time, gift cards and credit acquired through Blockbuster’s trade-in scheme will be honoured towards the purchase of goods.”
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By threatening creditor returns, the government could undermine the UK’s World Bank insolvency ranking and cost creditors £8m a year, trade body R3 warms
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Peter Saville, Ryan Grant and Anne O’Keefe of AlixPartners will now become the supervisors of the CVA and monitor the implementation of the proposal