Ireland's best known home entertainment chain — Xtra-vision — has appointed receivers after being unable to pay its debts.
The business, which employs 245 part-time and full-time staff in 42 stores in Northern Ireland, said it was also facing pressure from online piracy, high rents and the general drop in retail trade.
Parent company Birchall Investments appointed business advisors Ernst and Young as receivers to the entire all-Ireland business at a court hearing in Dublin yesterday.
The directors said they would work with the receivers so that the business could be sold. However, stores currently remain open and trading as normal.
Xtra-vision had generated €1.5m (£1.27m) in earnings before interest, taxes, depreciation and amortisation in 2012, and expected to generate similar sums in 2013.
“But,” the company said, “it has become unable to meet its debts as they fall due as a result of the withdrawal of trade credit by a number of its key suppliers”.
The suppliers had in turn withdrawn credit from Xtra-vision because their own credit insurance had been taken away.
Xtra-vision also said that its retailing had been growing but film rental was declining, especially in areas where high-speed broadband made illegal downloading easier.
The company, which has 152 shops and 1,023 staff around Ireland, said gift cards and customer credit balances were unaffected and could still be redeemed.
Joint receiver Luke Charleton said: “We are advised that the majority of stores are profitable and collectively will be attractive to potential purchasers. We will work closely with management to assess the viability of each of the company’s stores.
“The joint receivers will be briefing all staff and contacting suppliers to ensure that trading continues as normal.”
He said the business would be advertised to potential buyers so that it could be sold quickly.
Sinn Fein Fermanagh MLA Phil Flanagan said the receivership was “a blow to workers across Ireland”.
“We have the same failing polices being implemented by parties in London and Dublin,” he said. “This policy is costing jobs and driving emigration. It is clear that the economies north and south require investment.”
Ernst and Young had also been appointed interim examiner to the company two years ago. At the end of the examinership, the owners then pledged another £7m investment and negotiated new rental terms at around half of its outlets in the Republic. Birchall Investments bought the chain from US firm Blockbuster in 2009.
Just like HMV, Xtra-vision has fallen victim to the growth in popularity of downloading films, games and music.
Streaming movies through an online service such as Netflix has made a trip to Xtra-vision less appealing to many film fans.
Although the company had repositioned itself as a provider of other forms of home entertainment, such as computer games, it wasn’t enough to stave off its current financial woes.