DV or not DV...Zat iz ze question

A forum for DV customers, suppliers and staff – past and present – to post their experiences of the wunderbar new shopping experience

The background.

On May 10^th 2013, White Rabbit Records Limited, the owners of DV247 (Digital Village) ceased trading. Simultaneously, a new company, DV247 Limited, took over the assets of the company (but not the liabilities) and attempted to continue business as if nothing had happened.

Not quite…

At 10.42 am on May 10^th, minutes after this magical Paul Daniel-esque disappearing (white) rabbit trick, in a piece of disinformation that would even make Tony Blair blush, Gavin James of Digital Village posted this remarkable piece on the Sound On Sound forum.

 Hi,

Something very exciting has happened here at DV247 and it is with great pleasure that we unveil our new partnership with the European retail giant, Music Store.

As part of the transition we will be moving all our back orders over to our new system where we will be able to allocate existing orders which should ship immediately. As a result, customers will receive an email from either the sales person they placed their order with or one of our ‘My Order’ team who will provide a date on which to expect delivery.

Please be assured that this is a well-planned procedure and we have made every effort to ensure a smooth transition…

When I first read this, I assumed it was an attempt at sarcasm by a hacker. After all, who in their right mind would sack a third of their workforce, write off millions of pounds owing in redundancy pay, unpaid invoices to suppliers, VAT and PAYE due to HMRC, close seven stores without warning and effectively decimate the lives of many staff and small suppliers and then announce brazenly that ‘Something very exciting is happening here…’

Has the man no shame? Has he not one iota of sympathy for longstanding colleagues sacked overnight without warning or proper compensation? Has he no embarrassment at stiffing scores of suppliers who have supported his business for twenty years?

I think this statement speaks volumes for the ethos and callousness of DV management.

Oh, and it’s also factually misleading.

Firstly, DV’s relationship with the new owners (Koelner Parkhaus GmbH, as associate company of MSP - Music Store Cologne) is as much a partnership as my relationship with you, whoever you are. MSP, or their convoluted holding company (details please, DV 247 - I'd love to know the tax and other relationships between all involved) own the new company, lock stock and barrel. There is not the slightest whiff of partnership involved. DV247 Ltd is as German as BMW, Volkswagen or Bratwurst.

Back orders…ah, here’s an interesting issue.

As part of his purchase of THE ASSETS of White Rabbit Records Ltd (including the website, customer and mailing list, Romford property, goodwill – ha! – fixtures and fittings and stock), Michael Sauer, the owner of Music Store, claims that he will honour in excess of £350,000 of back orders - £350,000 of customer’s money taken by DV almost certainly in the full knowledge that they would never be able to supply the goods. So well done, Herr Sauer. Hmmm…looking a little more closely, he’s not being quite as generous as first meets the eye. Firstly, because Music Store now has the right to collect over £400,000 of money owed to DV, somewhat more than the ‘generous’ agreement to supply gear already paid for by customers. And secondly, because I am very reliably informed that MSP paid the whopping total of £27,000 for all DV’s stock. Yes, that’s right – less than the price of an average second hand Mercedes.

Now, just how much stock has he acquired for the around the cost of a modest bedroom studio? It’s impossible to say, as according to the administrators, Grant Thornton, they didn’t bother to get a valuation of the stock, the fixtures and fittings (computers, networks, desks, vehicles if any, shop display units and a mass of other trappings) or even the Romford property, acquired as part of MSP’s dodgy ‘prepack’ acquisition.

So DV had £27,000 of stock, did they? Not according to accounts filed eighteen months before, where the figure seems closer to £4 millions. Not according to strong rumours of £1.5 millions of stock currently locked in the warehouse of their distribution company. And not according to the flashy photographs of the ‘Romford Superstore’ blazoned all over their website.

But as Gavin James so proudly and publicly bleats, customers awaiting their orders should be in receipt of an email from the salesman they dealt with (maybe forwarded from the dole office) detailing when they should receive goods. If you’re one of these customers, please post details of your experiences below. Did you receive the email? More to the point, have you received your order yet? I’d like to hear from you – ideally good news, but if not, let me know anyway.

So what of this stock? Of course, most (and more) was unpaid for and in all likelihood will never be paid for. The most recent figure I’ve heard was that unpaid bills to suppliers top £3 millions and counting. Most suppliers have something called ROT (retention of title), which means that if the goods haven’t been paid for, they remain the property of the supplier, who can reclaim them. But as with all aspects of this appalling saga, nothing is as simple as it seems. Indeed, as more and more information comes to light, it seems that this prepack was rushed through with indecent haste, maybe because the directors knew that the warehouse was about to foreclose on stock due to unpaid bills, or maybe because DV had not submitted their accounts for the year ending 30^th September 2012 and were about to be blacklisted by credit rating agencies and therefore suppliers, who’s insurers would immediately stop cover because of the failure to submit accounts.

Anyway, what of the very, very many items of unpaid stock that have already been sold? Well, the unlucky purchaser may soon receive a letter telling them that they don’t actually own the goods they paid for and have received, which must now be returned to the original supplier. And as for all the goods in the Romford store and distribution warehouse subject to ROT, the lawyers are sharpening their teeth and polishing their fins as they circle what by all accounts is becoming an embattled and increasingly isolated company. There is a sniff blood in the waters around Romford…

The managers of DV Romford (the same bunch that cleverly steered the company onto the rocks) are still at the helm and are refusing to release anything to suppliers including, I’m told, stock loaned to them for demonstration purposes and to which, therefore, DV 247 Limited have not the slightest legal claim. So much of the much vaunted stock that the advertisements and website loudly promotes and shows in the racks at Romford actually belongs to others and is effectively being held hostage. But the bulk of stock - £1.5 millions – is locked in a distribution warehouse in lieu of unpaid warehousing and shipping bills. And my understanding of the legal position is that irrespective of whether much of this stock belongs to suppliers, the warehousing company may have the right to auction off the gear to settle their outstanding account, adding insult to injury.

So where are we now?

It may seem that the initial outrage and kafuffle surrounding the bankruptcy and prepack sale have died down. Not a bit of it. For despite the tailing off of public protest, behind the scenes the legal artillery are lining up. The MIA (a trade association) have taken specialist legal advice, which has questioned the legality of several aspects of the sale. Indeed, I suspect that our friend Gavin James may live to regret so proudly trumpeting the ‘…well planned procedure’ as many aspects of that planning may prove to have been so ‘well planned’ as to be unlawful.

http://www.mi-pro.co.uk/news/read/mia-challenges-dv247-deal-calls-for-creditor-unity/017730

Mr. James may well have to explain his ill-chosen words in the High Court one of these days.

So while the battalions of lawyers sharpen their quills and wade through a pile of statutes, DV will attempt to persuade the outside world that it’s business as normal.

But is it?

I have yet to hear of a single UK supplier who has agreed to sell to the new DV247 Ltd company. There may be some, but in that most if not all are owed money, none are likely to reopen accounts and resume supplies until and unless they are paid. And White Rabbit Records Limited would appear to have no remaining assets with which to satisfy creditors – MSP bought pretty much anything of value (for a pittance it is rumoured). Similarly, all the UK suppliers I’ve spoken to have made clear that they won’t repair or replace faulty goods until their outstanding bills are paid, even if they are under warranty. Why should they? Indeed, many already have goods awaiting repair in their workshops where they will continue to malinger, possibly until Romford freezes over.

But never mind, MSP will now undertake future repairs and honour existing orders and warranties, won’t they? Early news is less than encouraging. The much vaunted ‘next day shipping’ seems to be taking more like four days than one to arrive, and I have stories of incomplete shipments, B stock and broken goods being received. And can MSP cope with the tidal wave of faulty returns (for the next four years, remember) let alone a doubling of orders for their empty looking warehouse? And what about the DV 30 day money back guarantee? Word is circulating of unhappy customers being offered credit notes or alternative goods in place of their money back, as was loudly promised when they bought their gear. I’d be interested to know if this is true.

Of course, these may just be isolated incidents, but one of the main reasons for this post is to provide a forum for you, the Great British Public, to share you experiences, opinions, concerns and news with others. I’m going to sit back for a couple of weeks before posting an update, so for now this forum is all yours…


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