700 jobs go at Fopp and Music Zone music retail outlets as administrator Ernst & Young struggles to find buyer

Up to 700 out of a total 800 jobs at struggling music stores Fopp and Music Zone have been axed, after the former went into receivership and then later into administration.

Fopp took over 67 stores from failed competitor Music Zone in February, which is believed to have put pressure on the company’s finances.

The independent music retailer closed all 81 stores last week following a breakdown in rescue talks with Virgin Megastores.

Last Friday, Fopp appointed Ernst & Young as its administrator, and it immediately sent staff home as it sought potential 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 the suppliers who control the licenses to sell stock.”

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Ernst & Young said it would retain store managers while it “assessed the prospects”.

It follows news last week that rival HMV declared a £50m dip in profits for the year ending in April, amid difficult market conditions and growing competition.