The future of Xtra-vision was placed in doubt today by the appointment of joint receivers Luke Charleton and Colin Farquharson of Ernst & Young - affecting the DVD rental chain’s 152 Irish stores and 1,023 staff.
In a statement, Xtra-vision revealed it was no longer able to meet its debts as a consequence of the withdrawal of trade credit by a number of its key suppliers.
It reassured customers, however, that all gift cards and customer credit balances would be honoured and remain fully redeemable – avoiding a repeat of scenes caused by HMV’s recent financial collapse.
‘While the company's retail business continues to grow, its movie rental business has declined more rapidly than anticipated - most noticeably in areas with high speed broadband - which is linked to high levels of illegal downloading,’ the statement said.
All Xtra-vision stores will stay open for the time being, as the receivers seek out potential buyers for the chain.
Mr Charleston noted that the majority of Xtra-vision stores are still profitable and would be attractive to potential purchasers, and that they intend to work with Xtra-vision directors to ensure that trading continues as normal - to hopefully sell the business as a going concern.
‘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 added.
Xtra-vision is 60% owned by Birchhall Investments and 40% owned by NCB Ventures.
Increased online streaming and digital piracy have taken a serious toll on movie rentals and sales in recent years, with the HMV chain in Ireland and the UK the most recent high-profile casualty.
