Head Entertainment

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Head Entertainment

Type	Private
Predecessor	Zavvi
Founded	2 February 2009 (2009-02-02)
Founder(s)	Simon Douglas Les Whitfield Mark Noonan
Headquarters	Luton, Bedfordshire, United Kingdom
Number of locations	5
Area served	UK
Key people	Simon Douglas, Chief Executive Officer Les Whitfield[1] Mark Noonan
Industry	Entertainment Retail
Products	Books Consoles DVDs Games Magazines Music T-Shirts
Employees	160
Parent	Head Entertainment LLP

Head Entertainment is an entertainment retail chain in the United Kingdom. The company was formed on 18 February 2009 when Simon Douglas, former managing director of Zavvi and business partner Les Whitfield, purchased five stores from Zavvi Entertainment Group which was placed in administration on 24 December 2008.^[2][3] Head Entertainment competes with the likes of HMV Group.

Contents 1 History 1.1 Virgin Megastores 1.2 Zavvi 1.3 Head Entertainment 2 Dispute over Staff Transfers - Zavvi to Head 3 Employment Tribunals - Head Staff Fight for Payment 4 Operations 5 Head Records 6 Product range 7 See also 8 References

[edit] History

[edit] Virgin Megastores

Richard Branson started his first Virgin store on London's Oxford Street in 1971. In 1979 the company opened their first Megastore at the end of Oxford Street and Tottenham Court Road. Between the 1980s and 1990s, the chain grew, most notably through its merger with Our Price whilst under the ownership of WH Smith. By the 1990s Virgin Megastores had become an international franchise as part of the Virgin Group. During the early to mid 2000s Virgin Group decided to sell off most of its Virgin Megastores to various companies, including the French stores to the Lagardere Group and the American stores to Related Companies.

[edit] Zavvi

In September 2007 it was announced that the UK arm of the Virgin Megastores brand was to break away from the Virgin Group, in a management buy-out offer led by managing director Simon Douglas and finance director Steve Peckham.^[4] EUK, of the Woolworths Group, was the main supplier of Zavvi under an exclusive supply deal. As a result of EUK entering into administration, on 24 December 2008, the entertainment retailer was also forced into administration as it was unable to source stock on favourable terms direct from suppliers.^[5] As a result of its administration Zavvi closed the majority of its 130 stores, and sold some to rival HMV, and a new company Head Entertainment.

[edit] Head Entertainment

Head Entertainment was formed on 2 February 2009 by Simon Douglas, former managing director of Zavvi, Mark Noonan, former Director of Trading of Zavvi and their business partner Les Whitfield. Les Whitfield also founded the entertainment retailer Impulse which he sold in July 2007.

On 18 February, the day in which the final set of store closures was announced, Zavvi's administrators Ernst & Young sold 14 of the stores to HMV, and 5 stores to Head Entertainment. An additional 2 stores were purchased on 20 February 2009. A third additional store, the former Zavvi store at The Mall, Cribbs Causeway was also going to be purchased, but the company was unable to reach an agreement with the landlord. The store has subsequently been taken over by HMV who have re-located from their former premises at Cribbs Causeway and have employed some of the former Zavvi staff. All of the remaining stock which Zavvi owned was sold to Head Entertainment. It is thought that the partners in Head paid less than 20p a unit for the Zavvi stock.

[edit] Dispute over Staff Transfers - Zavvi to Head

The neutrality of this article is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (November 2009)

Staff who worked in Zavvi stores that were bought by Head Entertainment on 18 February received letters from Ernst & Young, the failed company's administrators, stating the terms upon which the sale had been completed. The letters stated that "your employment will automatically transfer to the purchaser, Head Entertainment LLP. From that time onwards, pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006; Head Entertainment LLP will become your employer. All your accrued rights will be preserved and your terms and conditions of employment will be unaltered. For the avoidance of doubt, the transfer of your employment does not affect your statutory rights in any way and your date of commencement of continuous employment remains unchanged."

All staff in stores sold to HMV were transferred with full continuity of employment.

This effectively meant that, unlike their colleagues who had been made redundant by Zavvi, these staff could expect to be paid redundancy by Head when the stores were closed. It also meant that Head were liable for the payment of the holiday accrued under Zavvi (before administration) but not taken. Additionally, staff would be able to expect to be paid for, or work, their full notice period. Staff were subsequently told, in meetings, that Head were not treating them as having continuity of employment. The three partners in Head; Simon Douglas (former Zavvi CEO), Les Whitfield and Mark Noonan (former Director of Trading for Zavvi) stated that staff had in fact been "made redundant" on 17 February 2009 and "re-employed" by Head on 18 February. Bizarrely, staff were not told this important information at the time nor were they invited to apply for these "new" jobs. Staff were simply informed on 18 February (in phone calls from their new employer, on holiday in Antigua) that the stores were now owned by Head and that the project was expected to last four to six months. The stores were later told that Head did not consider TUPE to have applied and that they should claim redundancy and other monies from the Secretary of State. On 10 March a letter was sent to all staff to confirm this. It was explained to staff that Head expected to be able to pay a performance related bonus to staff with the money they saved from avoiding TUPE responsibilities. In effect, many staff were seeing money which they had a right to being used to create a bonus scheme which they might or might not qualify for.

Ernst & Young wrote to all staff on 13 March stating again that TUPE had applied to their transfer. They stated that, if staff claimed redundancy from BERR (Dept for Business, Enterprise and Regulatory Reform) and the claims were, as expected, rejected on the grounds that TUPE applied, they would have to take the matter to Employment Tribunal. Staff who claimed redundancy and other payments from the Redundancy Payments Office subsequently received rejection letters based on the fact that in the opinion of the Insolvency Service "the business in which you were employed was transferred to Head Entertainment LLP within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)."

Staff were treated, by Head, as new starters with start dates from 18 February 2009. Therefore Head refused to pay sickness pay and did not honour contracted notice periods. No new contracts were issued to staff and no P45s issued (despite Head's assertion that staff had been "made redundant"). Staff from closed stores have found themselves with a P45 for the period from 18 February but no record of any tax or employment with Zavvi (either prior to or during administration).

[edit] Employment Tribunals - Head Staff Fight for Payment

As a result of the above dispute, existing and former Head staff have been forced to take the matter to Employment Tribunals. These have been delayed and postponed after Head's solicitors resisted the claims and sought to challenge the stated position of Ernst & Young in relation to the sale of the affected Zavvi stores. Staff from closed stores are unable to receive any money owed to them (including redundancy payments) as a result of Head's stance. Bluewater closed in June 2009, Cardiff and Liverpool in early August; none of the staff have received any redundancy or other payments other than wages and will not until the tribunals are settled.

In August the Sunday Telegraph carried a piece (see link below) outlining the plight of the employees.^[6] In it, a spokesman for Ernst & Young said: "The joint administrators were appointed to Zavvi Retail Limited on 24 December 2008. On 17 February 2009 seven stores were sold as a going concern to Head Entertainment. The employees in the stores transferred to the employment of Head with their existing terms and conditions of employment under the Transfer of Undertaking Regulations. "Head contacted the transferring employees to advise them that TUPE does not apply in these circumstances and that they believe the employees were made redundant by Zavvi Retail. "TUPE is in force to protect employees' rights on the transfer of a business, and the administrators contest that this group of Zavvi employees have transferred to Head by operation of law."

The first hearing is planned for Leeds on 20 November 2009.

[edit] Operations

Head Entertainment currently operates 5 stores in the United Kingdom, situated in Bristol Broadmead,^[7] Dundee,^[8] Leeds,^[9] Meadowhall Sheffield and Merry Hill.^[10] They are all former Zavvi outlets.^[2]

The Head Entertainment stores situated in Bluewater,^[11] Manchester Arndale Centre,^[2] Cardiff & Liverpool One have now closed due to competition on their rents.^[12][13]

Recently Head have begun stocking new chart releases, usually at RRP and higher than its competitors pricing. This is clearly NOT ex Zavvi stock. Woolworths' 'Worth It' branded DVDs are also found in Head.

[edit] Head Records

Back in 2007, the similarly named Head Records had opened following the closure of the Fopp store in Leamington Spa.^[14] Head Records is owned by Indulge Retail Limited, which was previously run by one of the partners of Head Entertainment, Les Whitfield.

[edit] Product range

Head Entertainment stores stock a range of products from Audio, Books, CDs, Computer software and hardware, DVDs and Video Games.

[edit] See also

• HMV Group
• The Hut Group
• Zavvi

[edit] References