Entertainment UK

Entertainment UK, the market leading wholesale distributor specialising in entertainment products, became a casualty of the credit crunch, when its parent company, Woolworth Group PLC, entered administration in November 2008.  This created a highly complex situation, encompassing over 200 suppliers, 100 customers, over £200m of inventory and a very difficult retention-of-title legal position. 

In partnership, Gordon Brothers formulated a strategy that would utilise existing relationships and distribution networks to maximise the return on stock that existed within the business.  A plan which saw distribution centres and stock management systems consolidated enabled EUK to retain its ability to service both the existing customer base and newly developed parties.  Gordon Brothers’ multi-talented team led detailed negotiations with Entertainment UK’s 100+ retail customers, developing 4 unique sub-strategies - reflective of evolving demand and supply constraints - for extracting maximum value from different market segments. 

In conjunction with this activity, the Gordon Brothers’ team also assisted in unwinding the RoT supplier positions, through detailed negotiations with individual suppliers.  When the RoT position could not be negotiated, Gordon Brothers organised the return of stock to suppliers.  These activities, combined with a re-engineering of the distribution process, provided Gordon Brothers with the opportunity to negotiate the sale of large stock parcels, to customers both in the UK and across much of Europe.  This helped realise the maximum value for stock during a period of extreme market turbulence and retail hardship.

Gordon Brothers’ understanding and experience in the retail environment was put to good use in facilitating effective pre- and post-Christmas stock supply to EUK’s existing retail partners. This provided a win-win situation for both retailers and EUK alike, and established important routes to market for the remaining stock. The conclusion was that the liquidation plan was successful in achieving maximum value on behalf of the Creditors.

Dan Butters, partner, Deloitte, said, “Gordon Brothers were appointed by Deloitte to act as agent to liquidate the inventory of Entertainment UK, as part of the process of administration of Woolworths Group PLC.  They reacted to the instruction with urgency, developing a comprehensive trade-out strategy within 48 hours.  They delivered a first-class result - utilising their core asset-disposition capabilities through a large scale, multi-channel exit plan.  They integrated seamlessly with both the Deloitte team and the incumbent Entertainment UK team and executed their plans in a highly collaborative fashion, whilst maximising cash recovery.”