Our take...
Woolworths' retail share of the UK DVD has fallen consistently over recent years from 17% in 2000 to a smaller but still substantial 8.2% by year end 2007. EUK is also a significant player in the UK's home entertainment sector accounting for over a quarter of all DVD supply (see 2008/247b1). The shortening of credit agreements across the sector earlier this year clearly affected EUK's ability to trade effectively through the crucial run up to Christmas.

The wholesaler services a number of accounts with major UK retailers, entertainment specialists such as Zavvi, generalists Woolworths and WH Smiths alongside UK supermarket chains such as Asda, Morrisons and Sainsburys. EUK's predicament will directly affect home entertainment supply to these retailers during the Christmas trading season, with the possible exception of Wal-Mart owned Adsa, which only last month established a number of direct studio accounts. Studios' and retailers keen to get product to consumers will be understandably reluctant to trade through EUK which will continue to trade from existing stocks. Retailers will need to swiftly either establish direct accounts or trade with remaining UK wholesalers such as Handleman to ensure a continued supply of new release DVD stock over the gifting season.