700 jobs axed at music stores

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The job losses come after Ernst & Young was appointed on Friday

Management sent staff home last week and E&Y has appealed for buyers to take on individual stores.

Joint administrator Tom Burton said: "It is unfortunate that we have had to make these redundancies but we are not in a position to re-open the stores until we have the agreement of suppliers who control the licenses to sell stock."

E&Y added that it was retaining store managers while it "assessed the prospects" for possible re-openings.

But the job cuts will also be felt at Music Zone after Fopp bought 68 stores from the chain when it too fell into administration in January. Fopp has since closed 33 of these stores, before Ernst & Young was appointed.

E&Y, which was appointed as receivers for Fopp and administrators to Music Zone, said the losses would affect 50 Fopp stores and 35 Music Zone stores across the UK.

Fopp started life as a market stall in Glasgow in 1981 and is best known for its cut-price CDs, DVDs and books.

The firm is just one of several music retailers which have been suffering from falling sales amid increased competition from internet retailers, digital downloading and supermarkets.

Fopp reported pre-tax profits of £184,000 for the year to April 2006 on a turnover of £40.1 million. It is understood that turnover had been expected to hit £50.7 million in the year to April 2007.