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Retailers turn to brand names and domains to build business

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The Hut Group has acquired movie, games and music retailer Zavvi and has brought it back as an online-only retailer.

The new Zavvi website will offer a much broader range of entertainment products as well as a new range of lifestyle products, including electricals, computing and perfumes, the company says.

"Zavvi.co.uk will be driven by a major focus on delivering exceptional customer service and product availability at much lower price points than previously on offer," says the official announcement. "Free delivery will be standard on all products sold on the Zavvi website."

Matthew Moulding, CEO of The Hut Group, explained the thinking behind the acquisition: "Zavvi is a major player in entertainment retail, both in the UK and Ireland. Our aim is to capitalise on this well recognised high street brand and transform the business into a leading class online retailer, not only in entertainment, but also across lifestyle products. The new discounted price points, supported by significant future investment in customer driven functionality improvements, should enable us to create an exciting online retailer."

"The team is excited about the opportunities this acquisition presents and the growth plans across The Group will be supported by our continuing drive to add talented new members to the team across most disciplines," he added.

In December 2008, The Hut Group was recognised by The Sunday Times and Bank of Scotland as Britain's Entrepreneur of the Year, securing both £5m of interest free finance for three years as well as mentoring through 2009 from entrepreneur Sir Tom Hunter. Alongside the company's online retail site TheHut.com, the Hut Group runs a white label website service for a number of leading retailers including Asda, Tesco, DSGi group and LoveFilm. The company says it anticipates achieving sales of more than £75 million in 2009, having achieved a turnover of £25 million in 2008.

The Hut Group had also been interested in Woolworths, head of ecommerce Dominic Starkey, told NMA this week. "We had been looking at Woolworths, but that didn't happen. In many respects it has worked out better with Zavvi," Starkey said. "We're looking beyond HMV and Play.com as competitors, more to Amazon.com. That's where we want to take the Zavvi brand."

Toys R Us, meanwhile, continues its recent series of commitments to its online business with the announcement that it has spent US$5 million on the purchase of the Toys.com domain name. Last month, Toys R Us acquired eToys and, in January, it announced it was moving onto an all-new Hybris-based ecommerce platform.
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