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By Julian Goldsmith, 3 March 2009 16:26

NEWS

Assets of the defunct multichannel entertainment retailer Zavvi have been acquired by The Hut Group for an undisclosed sum.

The Hut - which runs white label retail sites for 15 retailers including Asda, Dixons and Tesco, as well as its own-brand website selling products from entertainment to apparel - has bought Zavvi's brand, internet domain and customer database.

The purchase is part of a planned expansion of the company's strategy of selling direct to consumers, according to The Hut CEO Matthew Moulding.

"It's true Zavvi as a brand is only two years old but it is known by consumers in the UK and Ireland. What is more, Zavvi spent an awful lot of money on building a valuable customer database with detailed customer purchasing histories," he told silicon.com.

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Moulding added the database has details of more than one million loyal Zavvi customers and he hopes to have retained an absolute minimum of half of them by the end of the year.

"TheHut.com launched as an unknown from a standing start and this year we expect to make £10m in sales. We think the chances of success with Zavvi, given its established customer base, are quite high," he said.

Alongside the database, The Hut also acquired the server hardware and software code that supports the Zavvi site. The Hut Group, The Hut's parent company, will also be looking at a number of outsourcing arrangements struck by Zavvi's former owners to decide which ones it will retain.

The Zavvi site, which was relaunched today, will expand the number of categories it offers including electricals, computing, perfume and lingerie.

Moulding said: "It's a well designed and up-to-date retail site which we will be using to build new features on and to port to our other sites. We are looking to launch video trailers and introduce lingerie catwalk functionality."

The Hut will be on the market for other online retail businesses generating £5m to £10m in turnover, specialising in other categories, according to its CEO.

"There aren't a lot of product categories we aren't interested in," he said.

Zavvi went into administration over Christmas last year, following the collapse of Woolworths' entertainment products distributor Entertainment UK the previous month. Zavvi was formed in 2007 through a management buyout of Virgin Megastores.