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AIA

Xtra Vision collapses into receivership with EY

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9th May 2013
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Ireland’s largest film rental chain Xtra Vision has entered receivership with Ernst & Young.

EY Ireland has appointed Luke Charleton and Colin Farquharson as joint administrators, who intend to continue trading the company normally, and eventually selling it as a going concern.

The company, which employs more than 1,000 people, will close 11 stores in Northern Ireland and nine in the Republic, potentially affecting 112 jobs. However, many of these will be relocated to other branches.

A downturn in movie rentals and withdrawal of credit insurance were given as the main reasons for receivership.

Xtra Vision operates on a registered member customer basis, where only those with membership cards can rent. It has 400,000 customers on its database, alongside its non-rental sales, which include films, games, game consoles posters, CDs, greeting cards, some snack foods and drinks.

The brand transitioned itself in recent years from primarily being a movie rental company to a broad based provider of movies, games and home entertainment products, competing with other Irish stores in the same market, such as GameStop and HMV.

The firm has been hit by the changing movie industry, affected by online movie downloads as was a similar case with the UK’s Blockbuster stores.

However, as Blockbuster was snapped up by turnaround specialist group Gordon Brothers, perhaps there is some hope for the ailing Xtra Vision.

EY’s Charleton said that they are advised the majority of stores are still profitable and will be attractive to potential buyers.

“We will advertise the business seeking expressions of interest from third parties with a view to securing the early and successful disposal of the Xtra Vision, thereby ensuring the continuation of the business,” he said.

Despite its profitability and reported earnings of €1.5m (£1.3m), the firm became unable to meet its debts.

The receivers assured customers that all gift cards, cash deposits and savings club amounts will be honoured.

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