Music Zone blames BoI for pulling plug

BRITAIN’S third biggest music retailer Music Zone, which called in the administrators earlier this week, has blamed Bank of Ireland for pulling the plug on the company.

Music Zone, which operates more than 100 stores across Britain, suffered poor Christmas sales. The company said that like many other retailers it experienced difficult trading over the festive season, but was optimistic about the future.

“There is a growing number of high street retailers like Music Zone experiencing challenging trading conditions. Pre-Christmas spending was also poorer than expected. The decision by our bankers to recover debts and withdraw credit facilities without notice and with immediate effect left us and our private equity backers with no real alternative other than to appoint administrators.”

Bank of Ireland said: “Following a period of difficult trading at Music Zone, Bank of Ireland regrettably concluded that it could no longer continue to support the business.”

According to some reports, Music Zone was on course to lose around €2 million this year.

Accounts filed at Companies House in London by the operating company — Music Zones Services Limited — show that, in the 12 months to May 31, 2005, the company made a loss of around €6,000 on sales of €104 million.

Music Zone is owned by its senior management team, who bought out founder Russ Grainger in March 2005 in an €18m deal backed by Lloyds Capital Development and Bank of Ireland.

Deloitte said that it hoped to find a buyer soon for the business, which employs 1,100 people.