The Xtra-vision story may not have a happy endingMonday 20 May 2013 08.21 By David Murphy
On the surface there may be reasons to be optimistic that Xtra-vision can survive in some form.
But dig deeper and the future looks bleak.
The stores are remaining open while the search begins for a buyer. The receiver says that most of the stores are profitable. Unlike many other retailers the company is not overburdened with debt.
However, this is a receivership not an examinership.
With the latter there would be more grounds for hope. Xtra-vision was restructured two years ago and now is in trouble again.
According to a study by Grant Thornton and Retail Ireland, 73% of audio visual content was purchased online last year.
But in 2015 that figure is expected to rise to 90%.
Over the past eight months the trend of consumers downloading or streaming content rather than buying it from a shop has accelerated rapidly.
In a statement, the company said the decline of its movie rental business had been more noticeable in areas where broadband coverage has improved.
Xtra-vision also blamed illegal downloading. But the company does not have a facility to stream movies online, so even if all the downloads were legal, Xtra-vision would still lose out.
The company employs just over 1,000 people, three quarters of whom work in the Republic. The next few weeks will decide their fate.