High Street Shoppers Face Fewer Choices

Nearly 2,000 jobs could be in jeopardy after high-street DVD rental chain ChoicesUK called in the administrator.

The group, which is the U.K.’s second-biggest chain behind Blockbuster, has reportedly failed to reach agreements with potential lenders or agree to a refinancing package with Lloyds TSB bankers.

ChoicesUK chief exec Anthony Skitt told The Times he’s confident in finding a buyer for the business, which has 170 stores across the country, and believes it will be possible to save the jobs.

"I’m very optimistic that this business will not be in administration for very long," he said. "We’ve had a lot of discussions over the past eight to 12 weeks so there’s a lot of people that have crossed our path.

"From September, we would have needed a lot of cash for the run-up to December and it became clear the only option was to go for administration.

"I thought we had found something that might have been acceptable but the bank, which in fairness has been very supportive, didn’t agree," he added.

PriceWaterhouseCoopers was expected to be called in to run the chain until a buyer can be found.

The DVD rental market has suffered a similar sort of downturn as the CD retail business as both have been hit by piracy and increased competition from online companies.

Low-cost music chains including MVC, MusicZone and Fopp have collapsed over the course of the last year, and even larger businesses such as HMV and Virgin Megastores have started to feel the pinch.

ChoicesUK was said to be in the middle of a restructuring plan to close 50 stores after a sharp downturn in trading. It was expected to run up losses of £4.6 million this year. Debts are thought to have snowballed to £13 million.

In the spring the company’s share price tumbled to 50 pence as Skitt warned that it was going to "substantially" miss its financial targets.

ChoicesUK shares were suspended at 10.25 pence, valuing the group at £1.9 million. They were trading at 240 pence at the end of 2003.