The Office of Fair Trading (OFT) is investigating whether HMV’s acquisition of Zavvi stores is a “relevant merger situation.”
HMV bought 19 Zavvi outlets and saved 380 jobs, but Tom Jack of joint-administrators Ernst & Young has confirmed the OFT is examining whether the deal will mean a “substantial lessening of competition.”
The last 18 Zavvi stores shut and the last 446 employees started to look for new jobs Feb. 20, three days after Ernst & Young had agreed to sell the 19 stores to HMV and a further five stores to Head Entertainment. Head is expected to buy another three during within a week.
About 110 employees will transfer immediately to HMV, with more coming back to work over the next two weeks as their shops are re-branded as HMV.
Jack said it was “a fantastic result for the employees and customers of the stores concerned,” although the good news was tempered by the news of the OFT investigation.
The HMV and Head deals also include all remaining Zavvi stock.
Jack said he regretted it wasn’t possible to sell Zavvi as a going concern, he’s pleased to have been able to secure continued employment for 629 Zavvi employees.