ZAVVI SHOWS STRONG GROWTH IN ITS FIRST CHRISTMAS

During its first Christmas trading the zavvi entertainment group trading as ‘zavvi’ experienced a 10.8pc increase in sales on the previous year when trading as Virgin Megastores (four week trading period ending 5 January).

· 10.2pc LFL sales increase (excluding online)
· Over 70pc online sales growth
· Margin Growth of 2pc

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“When you consider the downbeat assessment of the high street from certain quarters, our trading performance over Christmas is very encouraging,” said zavvi MD Simon Douglas.

“Although the team has a rich history in entertainment retail, there’s no getting away from the fact that zavvi is the newest kid on the block as far as customers are concerned so to perform as well as we have during such an important trading period has to be taken as a huge positive.”

Games
Games sales grew by 62.7pc on a like-for-like basis during Christmas despite the short supply of this year’s must-have gifts, the Nintendo Wii and DS.

Simon Douglas added, “We are thrilled with an exceptional 62.7pc LFL increase across our games business, especially considering the well publicised availability issues within games over Christmas. A strong release schedule, the continued success of next generation hardware and well marketed games campaigns made a real difference and we expect more of the same in 2008.”

DVD
DVD sales grew 6.4pc LFL on the back of a strong growth during Christmas 2006. However, continuing price deflation on chart and new release offset significant growth experience on range and box sets. A positive for the future film market was the growth demonstrated by Blu Ray and HD, where zavvi’s market share peaked at 15.8pc, partly fuelled by the reduction in price of HD players and the growing install base of PlayStation 3.

Music
Music was down 11.6pc on a LFL basis on the back of a weak release schedule and price deflation effecting chart sales. zavvi did experience positive growth on catalogue and range during Q4 and this year’s outlook for music looks more positive with the likes of Oasis, Madonna, Coldplay, U2, Kasabian and Razorlight scheduled for 2008 releases.

Other Product
The complementary ranges of books, clothing and digital hardware saw a positive 45.2pc LFL increase reflecting an greater focus in these areas.

Looking ahead
Other initiatives planned for 2008 include:
· New stores for Belfast, Camberley, Bristol and Liverpool
· Store re-branding programme complete with new window and in-store branding in place by end of January
· Website re-branded as zavvi by 14 January with further customer and back of house enhancements to follow

Douglas concluded by saying ‘For a business that launched on 14 September with a brand new name, Christmas trading has been excellent.”

“The commitment and performance of staff has been a major factor of this success. We now want to consolidate our Christmas performance and drive further significant growth through games, HD DVD, books, posters, clothing and digital hardware. We remain upbeat about the potential of the music and DVD market and are fully committed to these core markets to further push our specialist credentials.”

“This year will also see a further push to grow our e-commence business which will play a key role in the future success of zavvi.”

For more information, please contact:
Alex Wilkinson alex@borkowski.co.uk
or Emeka Njodi meka@borkowski.co.uk
at BORKOWSKI PR
020 7404 3000